EU telecoms regulation needs to change

06 March 2012 | Kavit Majithia

European network investment is being hindered by stringent regulation in the region, according to leading sector groups.

Credit Suisse, a global leader in lending in telecoms and technology found that 90% of companies surveyed on funds did not believe present EU telecoms regulation encouraged investment.

Market analysts have consistently claimed access to copper in Europe has been too highly priced, and there is an increasing need to bring this down to encourage investment in fibre.

This however, is a contrasting view to leading investors. The Financial Times reports that none of those surveyed believed lowering wholesale access prices for copper will mean an inevitable investment in FTTH - with many senior management heads at large telecoms groups believing lowering revenue in copper will mean investment in fibre will take even longer. According to the FT, investment in fibre from high-risk hedge funds could already have occurred but EU regulation has meant only long-term investment has been possible, which goes against the nature of hedging.

Regulators have further come under scrutiny in the investment banking report, with many surveyed citing a lack of understanding by both operators and investors in present market trends, a high level of favouritism of resellers, and pro-consumer bias in European telecoms.

Investors did look favourably on the EU’s Digital Agenda, complying with the commission’s view that higher broadband speeds will lead to sustained economic growth.