January 30, 2013 / 7:30 PM / in 5 years

EU telecoms chief plots '10-step plan' for single market

* Ten steps to single market - Kroes

* Telco chiefs want more mergers

* Mergers not on list

* Ten steps can lead to mergers - Commission

By Claire Davenport and Leila Abboud

BRUSSELS/PARIS, Jan 30 (Reuters) - The European Commission is to come up with a 10-step plan aimed at improving broadband speeds and ultimately forging a pan-European telecoms market, telecoms commissioner Neelie Kroes said on Wednesday.

The Commission is under pressure to meet ambitious goals it has set for itself, including one that 50 percent of all households should have broadband speeds above 100 mbps (megabits per second) and that all citizens have speeds of over 30 mbps by 2020.

Speaking at an industry seminar in Brussels, Kroes said that the business case for broadband investment was lacking, blaming time-consuming civil planning rules, widely divergent prices for both consumers and businesses and scarcity of radio spectrum as part of the problem.

But Kroes said the creation of a truly single European market where big companies compete fairly across borders and face the same regulations in every national market was part of the solution.

“We can make (broadband investment) easier, using our single market. By smashing barriers, thinking big and helping companies to build their business case,” she said.

“In the coming months, and beyond, I plan a package of 10 steps to make the European telecoms market more integrated, coherent, and efficient, to give digital Europe its broadband boost.”

The outline plan does not mention consolidation but a spokesperson for Kroes said its overall impact would allow more mergers to take place that comply with the EU’s competition rules.

Otherwise the plan largely repackages ongoing efforts by the Commission to get high-speed fibre broadband networks, a sharing of mobile radio spectrum and net neutrality - ensuring that competing services can co-exist.

The speech was aimed at addressing long-standing criticisms from Europe’s telecoms industry that their businesses are being undercut by stringent regulation from Brussels, leaving them less willing to invest in costly broadband networks that will take decades to pay off.

Telecoms firms have also been lobbying Brussels to allow more acquisitions to consolidate European markets, which they see as a crucial way to boost profitability and spur investment.

Executives from Deutsche Telekom, France Telecom , Telecom Italia, Telefonica, Dutch provider KPN and Belgium’s Belgacom attended a meeting with EU competition commissioner, Joaquin Almunia in December to make their case for more mergers.

Last year the Commission took nearly a year to approve the acquisition of Orange Austria by Hutchison Whampoa and imposed significant conditions on Hutchison to protect competition.

Kroes told Reuters in June that she supports consolidation as a way to create a handful of strong cross-border operators which can invest more in mobile and broadband networks to close the gap with the United States and Asia.

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