Europe telecommunication sector hopes for leeway from regulators

Europe’s economic woes still loom over the heads of the masses. Unemployment rates are soaring and industry after industry is tumbling. Telecommunication sector is no exception to the premise and Euro regulators are not helping the cause.

One of the most viable options that telecom companies have for finding a way out of the oblivion is to consolidate their various services and make way for customers to consume wireless services over mobile phones in an economical way.

However, regulators are considering the benefit of the end users at the expense of service providers, who are still struggling in the consumer and stock markets. They are busy in the process of cutting down costs and laying off the workforce.

Telecom supervisory authorities are forcing companies to lower down their tariffs to be affordable for the consumers. However, they are not helping them to merge services with each other to render the services in a more affordable way.

The latest good news that telecom companies could use is the green signal given by the authorities to sell their services to smaller companies at wholesale rates, which will result in increased use and more affordable prices. The costs will be divided as well.

“The pronouncement out of Brussels (European Commission headquarters) would let incumbent operators earn a reasonable return on broadband investments,” said Evan Miller, a London-based telecom fund manager at Gamco Asset Management.

However, Miller is still sceptical of the new cushion provided by the government. These companies will have to take every step with precision, according to him.

“It’s not a panacea by any means, but is at least a step forward,” he said. “Each country still has to interpret the (rules), and the devil is in the details, as always.”

Regulators still impose the restriction that every country in Europe should have at least four competing telecommunication companies. The only exception is Netherlands, where the number lowered to three in 2007 when Deutsche Telekom’s T-Mobile merged with Orange.

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Posted by Usman Khalid on Sep 12 2012. Filed under Business, Europe, Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.