Consumers Demand More of Everything

Consumer Broadband Research Across the EU

Telecom, Media & Technology (TMT) | Economic & Financial Consulting

November 17, 2015

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European telecoms regulators have focused for some time on price regulation as a way of promoting consumer welfare. New research by FTI Consulting highlights the importance of a regulatory approach that also stimulates investment, innovation and service-based competition for the benefit of consumers.

With reform of the EU Telecoms Regulatory Framework as one of the key elements of the Digital Single Market (DSM) initiative, this is the right time for the EU to be considering a forward-looking approach that takes more explicit account of consumers’ perceptions of the relationship between price and quality of service.

The telecoms sector is now an integral part of a much broader internet ecosystem that includes a wide range of enabling technologies, service providers, content rights owners and ‘over the top’ players. Many of the actors in this ecosystem have very different revenue and investment models to those of the network owner/operators.

Telecoms network operators provide essential enabling technology for the broader internet ecosystem and therefore face high consumer expectations of the quality and availability of fixed and mobile broadband access services. However, as we noted in our March 2015 report ‘The trends driving consolidation in TMT and the role of regulation’, there is a perception amongst investors that the EU telecoms sector is falling behind global competition.

Whilst the European Commission and the national regulatory authorities recognise the importance of promoting efficient investment, they must also protect the consumer against excessive pricing and other threats. As we noted in our March report, it is this focus on price, compounded by broader regulatory uncertainty, which is blamed for undermining investment incentives.

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