Fighting for a level playing field, more competition and more choice for consumers.
Mobile Challengers
Europe’s Unfair Market

Challengers call for a “real” review of European mobile regulations

Challengers have built their success around competition and consumer welfare.
However, structural issues and the failure of the regulatory framework to solve these issues threaten to undermine the challenger’s success stories, and pose a real threat to genuine liberal, pro-market mobile markets across Europe.

A strategy without vision
Many of the existing anti-competitive problems facing Challengers are not being tackled by the draft regulation, even though these issues have a profound impact on the mobile market in most Member States and are recognized by independent bodies such as the European Regulator’s Group.

More worrying still, by failing to impart a vision for European mobile markets of the future in favour of adopting an overly-simplistic, one-size fits all approach to regulation such as the move towards symmetrical pricing, the Commission’s proposals actually threaten Challengers by allowing incumbents to increase competitive distortions and actually gain market power.

“The vision of the European Commission is supposed to be to promote competition. I’ve never seen a market where competition has increased by limiting the number of players,”
Thorsten Dirks, CEO, E-Plus

Large operators consistently fail to transform their scale to the benefit of consumers,
therefore what is needed is ex ante regulation in markets where competition has not
been realised in order to harmonise market conditions across the EU-27, and a full
and thorough analysis of planned new regulation to ensure that adequate safeguards
are in place both to ensure and improve levels of competition in the market place.

A fixation on a one-size-fits-all approach
Notwithstanding the clear structural differences between first and later entrants, the
Commission insists on a one-size-fits-all approach (e.g., in the debate on termination
rates). This approach, inevitably leads to an increase of the historical distortions that
already affect the competitive functioning of Europe’s mobile markets.

Fragmentation of regulated markets
By failing to take a holistic view of Europe’s increasingly sophisticated mobile markets, the EC’s current reform proposals already look out of touch. Rather than the narrow, simplistic definition of retail and wholesale markets favoured by the EC, Europe’s mobile markets are increasingly interlinked. Thus reform in the retail market, for example regarding roaming is useless without similar measures being put in place to prevent market distortion in the wholesale market.

Differing implementation
The implementation of European rules is often late, often flawed and is never implemented uniformly and simultaneously. The reason for this is because national regulators currently enjoy too much latitude when it comes to interpreting European rules, a freedom which can often lead to market distortions between and within national markets.

For example, in countries like the UK or the Netherlands, regulators rightly see their role as that of enforcing competition. But in others, for example Germany regulators are much more lenient towards the dominant operators, allowing them to control the market and leaving glaring abuses to the jurisdiction of the competition authorities.

“The idea that less operators is good for competition seems not to have worked in the past,” Christian Salbaing, Managing Director, Hutchison Europe.

The threat of consolidation
Competition in the mobile market should have resulted in less consolidation.
Yet today, seven pan-European operators (Vodafone, Deutsche Telekom, France Telecom, Telefónica, KPN, TeliaSonera and Telenor) serve 70% of the subscribers in 14 of the EU-15 countries, up from 60% in 2000. Somehow, despite all the evidence, the old argument that competition brings lower prices and better services appears to be in risk of being forgotten.