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Last Updated: Tuesday, 13 November 2007, 18:00 GMT
EU sets out new telecoms strategy
Mobile phone
Under the new rules, calls from one EU country to another could be cheaper
A single European Union-wide telecoms market could be in place from 2010 after the European Commission set out plans to increase competition.

Under the new plans, a regional watchdog would be created and former monopolies could be forced to split up their network and services operations.

The proposals will now be debated in the European Parliament.

However, analysts said there is likely to be opposition to the changes with Germany and Spain seen as critics.

John Davies, a telecoms analyst at Dresdner Kleinwort, said that several national governments are opposed to the idea of giving more powers to the European Commission, the executive arm of the European Union (EU).

"There is scope for the final version to be quite a lot different," he added.

Changing times

The driving force behind the changes is the EU view that more consistency between member nations' telecommunications legislation is needed.

The planned changes are designed to offer consumers cheaper broadband services and phone calls from fixed line and mobile handsets, the Commission also argues.

It claims that consumers are currently losing out because in many member countries, including Poland, Italy and Germany, the former state telecoms monopolies still dominate, particularly in the broadband market.

The Commission also added that technological developments mean there is a need to review regulation, especially as technology is moving away from more traditional fixed-line services that rely on copper wire infrastructure.

"From today onwards, a single market without borders for Europe's telecoms operators and consumers is no longer only a dream," said Josť Manuel Barroso, President of the European Commission.

Tougher oversight

As part of its plans to overhaul the existing telecoms sector, which is regulated differently in member state, it plans to create a new overarching EU authority to ensure regulatory consistency across Europe.

National regulators will be imbued with greater powers and independence with the ability to limit government interference.

However, the final say will lie with the EU, which wants to give its Brussels-based European Telecom Market Authority the power to overturn national decisions.

If approved, they will have to be adopted into national law by the EU's 27 member states before taking effect.

"There will be changes, and probably a bit more power ending up in Brussels," Dresdner Kleinwort's Mr Davies explained.

"But the key part will be that regulation will be less focused on copper and more flexible to cope with different access methods such as fibre or wireless."

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