Discussion Papers

Dieter Elixmann, Ulrike Schimmel, Rolf Schwab

Liberalisierung, Wettbewerb und Wachstum auf europäischen TK-Märkten
Nr. 227 / Oktober 2001

Summary

In the present study, a new methodology is designed that allows an objective and quantitative comparison of fixed-link telecommunications markets across countries. The study focuses on the market segments voice telephony and internet service provision and aims at analysing the status of liberalization, competition, and market growth. The WIK-Liberalization Index reflects to what degree the regulatory framework in each country is able to open up and to foster competition. The WIK-Competition Index provides a measure of the current competition situation. The WIK-Growth Index determines the current growth dynamics. The study investigates these features for the countries Austria, Denmark, Germany, France, Italy, Sweden, Switzerland, United Kingdom, and Hungary. Empirical evidence is provided as of January 1, 2001.

The fixed link markets of European Member countries have been opened up completely since at least three years. One can observe substantial progress in the appropriateness of the regulatory environment to enable competition in most of the countries. Yet, there are still remarkable differences across European countries in particular with regard to the treatment of still existing bottlenecks. This heterogenity rests in particular on the differences as regards interconnection and access to the local loop. With regard to the degree of liberalization, Denmark has a top position at the beginning of 2001. Although considerably behind Denmark, the United Kingdom, Germany, and Sweden have also made considerable progress in establishing regulatory conditions promoting competition.

The analysis of the actual competition situation in the fixed link market segment shows that competition is most intensive in Denmark and Sweden. Germany ranks only in a medium position. In almost all countries voice telephony price competition is very intensive. The concentration in the long distance segment is low. In contrast, the market concentration in the local segment is still relatively high. According to the penetration of broadband access as well as prices of internet usage and leased lines, there are strong differences among the European countries.

At the beginning of 2001, Hungary, Austria and Italy belong to the countries with the highest growth. Across all countries the growth rates in the internet segment are higher than in the voice segment. Italy has the highest growth rates in the internet segment, France is ranking at the second position.

Only German language version available.

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