Is there a threat of further price increases for telecommunication services in the EU?

Have you also been annoyed by price increases or other unwanted changes in telecommunications services? Maybe you've been cursing your telecom operator or decided to switch to another one. Can you imagine that your operator is leaving the market and you will be provided with services by the operator you left some time ago? And if it doesn't suit you, then you can only choose from a few other operators whose services you don't like for some reason, because the other operators are no longer active on the market either?

Does this sound like a bad dream? The Telecommunications Union of the Slovak Republic warns that under certain circumstances it may become a reality. The European Commission is currently dealing with the possibility of deregulation or a significant narrowing of the regulation of the electronic communications sector. As a result, the national regulatory authorities (NRA), in the Slovak Republic the Office for the Regulation of Electronic Communications and Postal Services, would no longer analyze the state of competition on the market and, in the absence of effective competition, would not impose obligations on operators with significant market power (with significant influence on the market) in order to support competition and market development. As a result of these negative changes, operators with significant market power could dictate pricing and technical terms that would further distort competition, crowd out competition from the market, and ultimately demand disproportionately high prices from end users.

An open letter to the European Commission draws attention to the impending problem

In this context, the Telecommunications Union of the Slovak Republic, a member of the European Competitive Telecommunications Association (ECTA), draws attention to ECTA's open letter addressed to the Ministers of Telecommunications and the Spanish Presidency of the Council of the EU. ECTA warns that in advocating deregulation without taking into account the existence of operators with significant market power, we would inadvertently encourage a shift from broad competition to a very limited number of larger operators in the market, while losing the benefits of effective and sustainable competition.

National regulatory authorities are currently applying the European Electronic Communications Code (transposed into national law in Slovakia since February 2022), mainly through conducting market analyses. Unfortunately, market failures that require adequate regulatory intervention are still identified in EU member states. In the absence of an operator with significant market power, national regulators cannot impose regulatory measures, so there is no need to change the current regulatory approach.

ECTA members put their full trust in the hands of the European Commission, namely Commissioner T. Breton. The future "Digital Network Act" should continue to focus on effective competition through ex-ante regulation of operators with significant market power and follow the principles enshrined in the European Electronic Communications Code applied judiciously and only where necessary. It is essential that this model continues to work and bring positive results for citizens, businesses and public administration.

It is worth noting that the EU model performs much better in terms of deploying high-capacity infrastructure compared to the US, where a competitiveness deficit persists, leading to limited choice and high retail prices.