EPP-ED Public Hearing: ‘Telecom Package’

Roland Doll, Vice President International Government Relations,

Deutsche Telekom AG Brussels, March 05 2008

Deutsche Telekom in Europe…

05.03.2008

Hungaria

Slovakia

Czech Republic

Poland

The Netherlands

Great Britain

Germany

Macedonia

PortugalSpain Italy

Belgium

Turkey

Russia

Denmark Sweden

Austria

Switzerland

Operation of Fixed and/or Mobile networksProvision of integrated ICT solutions for business costumers

Montenegro

Croatia

* EU-5, The Netherlands, Sweden ** Korea, Japan (2007 figures n.a.)Source: IDATE (2007)

Number of fibre-based connection subscribers(IDATE 2007)

Su

bscri

bers

in

Mio

.

0

2

4

6

8

10

12

Europe* USA Asia**

200420072004

2007

2004

2006

Asia and the US successfully extend their fiber-based infrastructure.

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Europe lags behind competing economic regions in terms of Telco-investments. Per capita levels are 50% higher in the US than in Europe.

In addition, investment rates in the US are rising due to consistent deregulation.

Result: the investment gap is widening.

*EU-15 **Japan, KoreaSource: OECD (2007)

Telecommunications-Investment per capita (OECD 2007)

US

Dollar

100

150

200

2003 2004 2005

Asia**

USA

Europe*

Investment levels in telecommunications - Successful turnaround after deregulation.

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Limits on Internet access capacity will eventually hamper innovation and growth.

1) nemertes research, The Internet Singularity, Delayed: Why Limits in Internet Capacity Will Stifle Innovation on the Web, November 2007

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Year

PetaBytes/Month

Estimated access line capacity based on current investment levelsEstimated demand. Increase mainly due to P2P, Web 2.0, HDTV.

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Deregulation intended by Review ‘99 has not been achieved despite competitive market development.Chart by European Commission, DG Infso, Nov. 2001, road show on the Review ’99

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Conclusions.

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The European Telecoms sector faces major challenges: against the backdrop of shrinking revenues in the sector, new fibre based access networks and next generation mobile broadband networks have to be rolled out to secure Europe’s competitiveness in the next decade.

Europe lags behind East Asia and North America in the deployment of high-speed next generation access networks and in overall investment levels.

Rapid increase in data traffic will lead to a multiplication of capacity required by consumers and businesses from fixed and mobile networks.

The regulatory concepts of the past have been successful in opening up former monopolistic markets but they are not adequate for stimulating investments in new fibre based access networks. The review must give answers how to adapt the regulatory regime to the investment challenge facing the industry.

If we want to stimulate growth in the telecommunications sector with positive spill over effects for the entire EU economy, deregulation must now be implemented, instead of further extending regulation. In order to achieve such a move towards the application of general competition law, legally binding exit rules are needed.