Increased competition in pan-European business communications could boost Europe’s economy...

Europe’s telecom market was liberalized in the 1990s, “significant attention has been given to the impact of increased competition on the services and prices available to consumers” and small- to mid-sized companies, it said. But while only about 2 percent of companies in the EU could be described as multi-site or multinational corporations (MSC/MNC), they form a major part of the European economy, it said. Although MSC/MNC business communications make up a large part of the telecom market, policymakers and regulators generally assume that larger businesses are well-informed and exert significant buying power when they purchase communications services, it said. As a result, there are few reports on their experiences with such services, but several surveys suggest that competition in this area is less well-developed than expected. The WIK report surveyed 112 multi-site and multinational businesses whose operations cover all countries in the EU27. Key findings included that: (1) Large companies primarily want communications “services” such as the Internet and mobile services, rather than the technological elements that underpin them. They seek service reliability, bandwidth and technical resilience, among other things. (2) Business communications services (BCS) usually encompass a bundle of different products and services, ideally tailored to the needs of each company. (3) Businesses overall prefer using a single supplier that handles a range of services rather than separate suppliers for each site and/or service. (4) End-user choice of suppliers is often limited. (5) Businesses most often complained about being unable to buy fixed and mobile services from the same operator. (6) The complexity and tailored nature of business services mean switching providers can be pricey and problematic. The problem in Europe is that the fragmented retail market, where several players compete for different customers with different requirements across Europe, means it’s not possible to assess specific market shares in the provision of cross-border business communications, the report said. In the few cases where national regulators have examined their retail markets for business communications, incumbents’ market shares have been higher than expected, often greater than those shares are for provision of broadband services to consumers and smaller companies, it said. It appears that national incumbent telcos may also be strongly positioned to provide mobile services to businesses, it said. There’s also a mixed regulatory picture on key wholesale products used for BCS, it said. All this provides “compelling evidence” that a cross-border retail market may exist for provision of bespoke (tailored) communications to larger businesses, it said. The report recommended that EU and national policymakers rethink their approach to acknowledge the importance of having competitive markets for communications in the business sector via consistent treatment of wholesale access for BCS. Such changes can’t happen until the EU e-communication framework directive is next revised, but the European Commission could consider several interim solutions, it said. One could be to describe the retail market for tailored business communications to larger businesses and identify it as a cross-border market subject to prior competition regulation. A second option would be rules to address the short-term regulatory gap, akin to the mobile roaming regulation, which would need political consensus with the European Council and Parliament, the report said. A more harmonized market definition of BCS and conditions for business access would help meet the demands of large corporations, it said. ECTA and INTUG urged the EC to move quickly to create a single digital market for business.