Measuring the impact of market competition analysis process in EU׳s electronic communications sector: Catalyst or impediment towards market competition?

• The impact of market analysis process in competition has been examined.
• Indicators relevant to telecom markets have been identified and observed over time.
• We conclude that the market analysis process increases the level of competition in all examined markets.
• At the retail level the market analysis speeded up the reduction of the retail charges.
• Competition promotion due to the market analysis process is more obvious at the wholesale level.

It has been a few years since the European Commission introduced the Common Regulatory Framework for Electronic Communications according to which all Member States are required to conduct market analysis in the relevant electronic communication markets and apply appropriate ex ante regulatory obligations in the case where competition was not at a satisfactory level. One of the main motivations behind the Commission׳s introduction of the Framework was the promotion of competition in electronic communications sector in regard to the welfare of EU citizens and the creation of a common market for electronic communications. Notwithstanding the fact that the telecommunications market has opened and new operators with new service offerings have emerged, a lot of criticism has been voiced regarding the Framework׳s effectiveness on several fronts (e.g. infrastructure based competition, wholesale/retail costs, uniform market structure across Europe). The paper takes another look at the implementation of the current Regulatory Framework and the ex ante remedies imposed across Member States. The implementation of the Framework is related to the evolution and competition of the fixed narrowband, fixed broadband and mobile group of markets, using indicators for an empirical discussion of the market analysis process in the EU. It uses data derived mainly from the European Commission itself and calculates indices that paint a clearer picture with respect to the evolution and competition in the above group of markets. Based on this process, the paper provides very strong indications that the current Regulatory Framework and in particular the market analysis process promotes competition both at wholesale and retail level. Finally, the paper suggests that the decision to remove market 15 from the list of markets susceptible for ex ante regulation should be revisited.