Telecoms CEOs call for pro-investment reforms from the EU

By Julia Fioretti

BRUSSELS, May 31 (Reuters) - The CEOs of some of Europe'slargest telecoms companies swooped in on Brussels on Tuesday topress the EU executive to do more to promote investment in newnetworks as part of a forthcoming review of telecoms rules.

The heads of KPN, Deutsche Telekom,Proximus, BT Group, Telekom Austria and Telenor met three European commissioners to discussthe need for investment in superfast networks to meet risingdemand for data services.

The European Commission is reviewing the 28-member bloc'scurrent set of 15-year old telecoms rules with the aim ofencouraging operators to increase coverage of fibre-optic cablethat can deliver speeds of up to 1 gigabit per second.

The six CEOs met with Competition Commissioner MargretheVestager, Commission Vice-President Jyrki Katainen and GuentherOettinger, the digital economy commissioner.

"Telecom CEOs will vouch for a strong pro-innovation andpro-investment approach to regulation," they said in a jointstatement with telecoms lobby group ETNO.

"Such an approach is needed to respond to Europeancitizens' quest for ultrafast connectivity and innovativeservices."

The Commission faces the difficult task of balancing thedemands of former state-owned monopolies that control most ofthe networks with those of operators who do not own their owninfrastructure and therefore rely on access to those networks toserve their customers.

Current rules, the original purpose of which was to breakthe hold of the former monopolies, force operators with"significant market power" to give competitors access to theirnetworks at regulated prices.

Companies such as Deutsche Telekom and KPN have long arguedthat such rules are a disincentive for investment since theylower the return on capital.

"That is the fundamental challenge the Commission faces,"said Rob Bratby, a partner who specialises in the telecomssector at law firm Olswang.

Bratby said that investors want certainty that regulatorsare not going to interfere, but such a laissez faire approachwould cause consternation among competitors.

Challengers such as Vodafone and TalkTalk, argue that it is competition that drives investment and keepsprices affordable.

Loosening obligations on incumbent network operators to openup their infrastructure or give them more leeway to set accessprices would be detrimental to such competition, they say.

(Editing by David Goodman)