Europe - dominant incumbents

Telecom giants keep stronghold on EU market

Former state-owned telecom operators occupy more than half of the EU fixed telecommunications markets whether for local, long-distance or international calls. However, prices have tended to decline, according to the latest data published by the Commission.

The latest data delivered by Eurostat for 2005 indicate that for local calls, the market share of the incumbent operators in the former EU 25 averages 72%. It has reached its peak in small countries, such as Cyprus and Slovenia, where the incumbents control 100% of the national markets. Meanwhile, Austria and Germany recorded the lowest shares for former state-owned operators, who manage 53% and 56% of the national phone calls respectively.

The same pattern emerges for long-distance calls, for which incumbent operators have 66% of the EU market share (the minimum, in Finland, is 45%). Moreover, former state-owned companies manage 56% of international calls (39% in Germany, again the minimum).

On the other hand, the dominance of incumbents does not prevent price decreases. In August 2006, the average charge for a 10-minute call on a weekday morning in the EU 25 was €0.36 for a local connection, €0.74 for a national connection and €1.79 for an international call to the USA (VAT included). The same calls in August 2004external had respectively an average cost of €0.4, €0.9 and €2.1.

In the mobile sector, incumbents' market shares are less remarkable, with an average of 39% registered in 2006 in the EU 25. Incumbents provide less than half of the subscriptions in the vast majority of member states. In the UK, they control 26% of the market, in Denmark 32% and in Poland 34%. On the other hand, in Cyprus, the former state-owned company controls 90% of the mobile market, and in Slovenia 71%.