You are on page 1of 5


98 EN Official Journal of the European Communities C 73/109

Opinion of the Economic and Social Committee on:

— the ‘Communication from the Commission to the Council, the European Parliament, the
Economic and Social Committee and the Committee of the Regions on the further
development of mobile and wireless communications — Challenges and choices for the
European Union’, and

— the ‘Communication from the Commission to the Council, the European Parliament, the
Economic and Social Committee and the Committee of the Regions: Strategy and
policy orientations with regard to the further development of mobile and wireless
communications (UMTS) — Outcome of the public consultation and proposals for
creating a favourable environment’

(98/C 73/27)

On 3 June 1997 and 23 October 1997, the Commission decided to consult the Economic and
Social Committee, under Article 198 of the Treaty establishing the European Community, on
the above-mentioned communications.

The Section for Transport and Communications was instructed to prepare the Committee’s
work on the subject; it set up a study group and appointed Mr Mobbs as rapporteur.

At its 350th plenary session (meeting of 11 December 1997), the Economic and Social
Committee appointed Mr Mobbs as rapporteur-general and adopted unanimously the
following opinion.

1. Introduction paging systems and 3 million users of data systems (1).

In addition Europe has seen the exceptional success
of the digital GSM (2), considered second generation
technology, (analogue technologies were the first) emer-
1.1. The growth of mobile communications in the
ge as a world standard for mobile communications.
last ten years has been phenomenal and enabled users,
Through its establishment as a single system, it allows
both business and private, to make and receive phone
roaming throughout most of Europe, thus creating a
calls, send and receive faxes, use the e-mail or the
truly pan-European services network and the bringing
Internet without having to depend on a fixed terminal
down of national barriers and increasing competition
connection. This growth has resulted in the expansion
and user choice. All this, together with the related
of the whole telecommunications market. The avail-
DCS-1800 and PCS-1900 technologies (known globally
ability of mobile roaming services in both advanced
as GSM1800 and GSM1900), has also made it possible
and many developing regions has made a significant
to introduce effective competition and market dynamics
contribution to the wider utilisation of all forms of
into the local loop.
telecommunications throughout virtually every econ-
omic sector. Widespread personal accessibility has also
helped overcome time zone and other obstacles to
international trade and activity. Whilst the growth of 1.3. To date nearly 200 mobile communications
mobile communications is forecast to continue its rapid networks based on GSM serving more than 55 million
expansion, the demand for fixed wire installations will users, demonstrate the success and acceptance of the
still continue in view of the ever increasing demands for system as a world-wide standard. However, there is
higher data transmission speeds and capacity at very no room for complacency since as the commercial
economic prices. As costs of mobile equipment and positioning of the industry develops in Europe and
services decrease, growth in new mobile connections is World-wide new GSM standards face fierce competition
expected to overtake growth in fixed connections, from different standards in the USA and variations in
especially after full liberalization of the European Japan.
telecommunications sector in most Member States from
1 January 1998. Further stimulus to the use of telecom-
munications in every sphere of business and social 1.4. UMTS (3) can be described as a mobile communi-
life will occur if users retain their telephone number cations system that, through a converged network of
regardless of the use of mobile or fixed telephones.

1.2. In Europe, this extent of mobile phone growth (1) See paragraph 2.1 of Commission Communication.
is demonstrated by the numbers involved — 37 million (2) Global System for Mobile (GSM).
users of mobile communications, 4,5 million users of (3) Universal Mobile Telecommunications System (UMTS).
C 73/110 EN Official Journal of the European Communities 9.3.98

fixed, cellular and satellite components, can ensure to 1.7. UMTS will operate in both terrestrial and satellite
all users in a competitive market universal access to environments. This will be important for the operation
mobile personalized communications, including high of UMTS in sparsely populated areas. Earlier this year,
quality multimedia services regardless of location, net- the Commission published a Communication on ‘An
work or terminal used. This is a European concept EU action plan — satellite communications in the
promoted by ETSI(1), CEPT (2), the UMTS Forum (3) information society’ (6) containing a more consistent
and the Commission which aims at permitting roaming approach in satellite communications. A generally
on a truly world-wide basis for the first time. It has the favourable opinion was adopted by the Committee (7).
support of the major European fixed and mobile
network operators and the manufacturing community.
The development of new technologies that become 1.8. Such has been the success of mobile telecommuni-
increasingly available will allow a more efficient and cations and such is the speed of the development of the
effective use of terrestrial and satellite communication associated technology, that the Commission believes
systems so that users benefit. In particular, UMTS aims that certain policy and strategic decisions need to be
at facilitating increased access to the Internet. taken to ensure their continued growth.

2. Commission communications

1.5. UMTS is intended to form part of the Inter- 2.1. The first Commission communication (May
national Mobile Telecommunications 2000 (IMT-2000) 1997) is in response to requests from the Council
family of global third generation standards. Under and the Parliament respectively for a report on the
the IMT-2000 programme, the ITU (4) is developing development of mobile communications.
recommendations to assist the relevant administrations
with regard to third generation systems and is currently
addressing the development of third generation mobile 2.2. The Commission communication summarizes
systems within the Radiocommunications (ITU-R) and the present situation and sees a need for details of future
Telecommunications (ITU-T) sectors. The work of the service concepts and of future user requirements to be
ITU is expected to be completed in 1999. addressed in order to formulate regulatory, frequency
and standardization responses at a European and
national level.

2.3. The Commission comments in detail and summa-

rizes its views in five key questions, and elaborates
comments upon them — prior to the replies of interested
1.6. The development of UMTS presents Europe with parties.
both a challenge and an opportunity to exploit its
leading position in this market and reap full benefits — Is this the right moment to define a strategy for the
from the emergence of full liberalization in most Member introduction of UMTS or would regulatory action
States and the opening up of world markets for basic today be premature?
telecommunications by the WTO (5). In particular,
UMTS may provide mobile access to a range of — Is there a consensus in Europe on the notion of
video-based communications, information and enter- UMTS or third generation mobile communications?
tainment services, increasing the synergy between broad- Will it be a single technology, or a number of
casting and telecommunication markets. The IT industry interoperable solutions based on different tech-
will also have a major role to play in ensuring the success nologies?
of UMTS in view of the importance of on-line content
for interactive multimedia services. — What should be the respective roles of the private
sector and of public authorities in the transition
towards UMTS?

— How can UMTS impact on the competitiveness of

Europe’s industry?
(1) European Telecommunicatioons Standards Institute — How do we ensure that the broader social and
(ETSI). societal interests are secured in the development of
(2) European Conference of Postal and Telecommunications
Administrations (CEPT).
the ‘wireless information society’?
(3) The UMTS Forum is a body inaugurated in December
1996 which, building on the existing work of the UMTS
Task Force, brings together regulators, operators, manu- (6) Communication from the Commission to the Council, the
facturers, satellite operators and other interested parties European Parliament, the Economic and Social Committee
and associations such as ETSI, ERO and ETO. It is financed and the Committee of the Regions — EU Action Plan:
by its 70 members and has a budget of ECU 500 000. Satellite communications in the Information Society —
(4) International Telecommunications Union (ITU). COM(97) 91 final.
(5) World Trade Organization (WTO). (7) OJ C 355, 21.11.1997.
9.3.98 EN Official Journal of the European Communities C 73/111

2.4. The Commission requested all interested parties — Adoption of UMTS Decision early: 1999;
to submit their views by 15 July 1997 but this date was
deferred to September at the request of the Telecommuni- — Mandate to ERC (1) on further spectrum allocation:
cations Council. February 1999;
— MRA (2) negotiations: continuous;
— WRC-99: extension of UMTS spectrum allocation:
2.5. The second Commission communication October 1999;
(October 1997) provides a synthesis of the comments
and contributions that were received. In particular, — Review of telecommunication regulatory environ-
clarification of the licensing regime that will be used ment: end 1999.
for granting UMTS licences and certainty that radio
frequency spectrum will be available in good time were
seen as critical areas where action by authorities is
3. General comments
required as a matter of urgency. There was an almost
unanimous view of Member States and industry that
this would create favourable conditions for the develop-
ment of UMTS and thus help preserve the competi- 3.1. The Committee welcomes the Commission com-
tiveness of European industry. At the same time, Member munications as a necessary step paving the way towards
States and operators felt it would be necessary to secure a European policy for the establishment of UMTS. The
basic customer interests such as Europe-wide roaming Committee is pleased that the second communication
for mobile multi-media services on the basis of a was issued in time for the Committee to be asked and
common, open and internationally competitive air able to comment.
interface standard in order that the European citizens
can benefit from the ‘wireless Information Society’ 3.2. The Committee agrees with the Commission’s
without frontiers as they can do today with voice using position (stated in its first communication) that a clear
GSM. and stable picture of UMTS is needed before it will be
possible to define fully what actions may be required at
a European level to make a positive contribution to the
future development of mobile and wireless technologies.
2.6. The Commission communication addresses the
following key issues:
3.3. The second Commission communication is a
welcome contribution towards two essential objectives,
— Industry and administration views on core and namely the identification of the industry’s position and
regulatory issues. the setting out of a timetable and the actions creating ‘a
favourable environment’ for UMTS. The Committee
endorses the main areas of consensus identified by
— Commission assessment of areas of consensus and the Commission in this communication. The detailed
issues for further discussion. comments in Section 4 expand on certain of those areas
of consensus.

— Orientations for public policy objectives, recommen-

dations for further action and proposed targets, 3.4. The communications acquire increasing import-
action plans and timing. ance in the light of the technological developments
which make the transition to the environment of personal
communication services possible to forecast. In its Green
Paper on Mobile and personal communications (3) the
Commission defined personal communication services
2.7. The Commission proposes the following Action (‘PCS’) as ‘person-to-person calling independent of
Plan and timetable: location and the terminal used, the means of transmission
(wired or wireless) and/or the choice of technology’.
— WRC-97: preparation of agenda WRC-99 (to include
UMTS spectrum allocation): October 1997; 3.5. Europe’s success in launching and establishing
the GSM system can be ascribed to the timely and
adequate coordination and cooperation between the
— Council Resolution on present Communication set- industry and the EU public authorities. The Committee
ting out the political priorities: December 1997;

(1) European Radiocommunications Committee (ERC).

— Proposal of a UMTS Decision on spectrum and (2) Mutual Recognition Agreement (MRA).
licensing conditions: January 1998; (3) Towards the Personal Communications Environment:
Green Paper on a common approach in the field of mobile
and personal communications in the European Union —
— Implementation of 5th Framework Programme for COM(94) 145 final, III, 1.7., p. 15. ESC Opinion: OJ C 393,
Research and Development: 1998; 31.12.1994, p. 64.
C 73/112 EN Official Journal of the European Communities 9.3.98

urges the adoption of an equivalent approach to the WRC (1) mechanism, must be made available to enable
issues attached to the transition to UMTS. The success UMTS to develop as the market demand grows. In
of GSM is also due to the fact that it was an open standard addition it is essential to ensure that sufficient spectrum
and provided full cross-border roaming functionality. remains available during the transition from GSM,
GSM has become the de-facto world standard for mobile DCS-1800 and PCS-1900 second generation systems.
communications with now more than 200 operators
running or building a network, the majority of them
outside Europe.
4.1.2. Frequency bands allocation. There is a need to
study what is the appropriate mechanism for the
3.6. The importance of the mobile communications allocation of frequency spectrum. Should this be done
manufacturing industry to the European economy, by auction? If so, is there any risk of outcomes
competitiveness and employment must not be over- which might adversely impact on the public interest, in
looked. European GSM equipment manufacturers enjoy particular the competitive structure of the market?
a leading position world-wide and it is imperative
Europe’s lead in this industry should be maintained with
4.1.3. Licences. The Committee considers that action
in this context must respect the industry expectations
3.7. The Committee is also aware that Europe’s that the first UMTS services should enter service around
success with GSM has alerted the rest of the world 2002, with widespread global availability anticipated
to the size of the market for mobile and wireless around 2005. To meet this timetable, an EU framework
telecommunications and that those who ‘missed out last should be established to ensure that the NRAs grant
time’ will be making every effort to ensure that this does licences through objective, transparent and non-
not happen again. Thus it is highly likely that aside from discriminatory licensing procedures with sufficient lead
the resolution of technical issues, the market strategy time starting as early as end of 1998. The Community
and international alliances of the major European mobile must ensure also that radio frequencies are allocated in
equipment companies will play as big a part in the global adequate time to operators.
development of UMTS. A strong home market would
seem to provide the best conditions for European
industry to compete in other parts of the world.
4.1.4. Regulation. Member States will have to take
necessary measures to complete the implementation and
3.8. As the wireless information society market application of EU legislation and the decisions on
becomes increasingly global, R&D, development manu- frequency issues reached within the European Radio-
facture and other investment decisions will be made, communications Committee. There is no doubt that the
more and more, on the basis of worldwide business current EU telecommunications framework applies to
strategies. Since the market, especially in Asia and the UMTS. For example, legislation and policy on issues
Pacific area is expected to grow even faster than in such as licensing, interconnection and roaming cover
Europe, European manufacturers must take all of this UMTS just as other fixed and mobile telecommuni-
into account. cations activities. However, the question of roaming
between UMTS and the existing second generation
systems (e.g. GSM, DCS-1800, PCS-1900) needs to be
addressed in detail.
3.9. In response to the second communication, the
Committee considers that EU policy must support the
competitiveness of European-owned industry but also
will need to guarantee the continuation of the European
single market by ensuring the benefits of European-wide 4.1.5. UMTS Decision. The proposed EU decision on
roaming provided by the GSM technology will continue UMTS should help to clarify the legal framework (e.g.
in the wireless information society. licensing and interconnection) for UMTS but it must
also extend that framework to include roaming and
certainty of radio frequency spectrum availability.

4. Specific comments
4.1.6. Standards. Open standardization will be para-
mount for the success of UMTS on a global basis.
4.1. The following expand on the main areas of Cooperation between Commission and EU Member
consensus identified by the Commission. States, and with the relevant organizations both at
European and international level, should aim to ensure
that the EU adopts a single approach to UMTS,
4.1.1. Frequency spectrum. A decisive factor in the
successful introduction of UMTS is the allocation of
adequate frequency spectrum. The Committee agrees
with the Commission that sufficient radio spectrum, to
be pursued in the context of the CEPT and within the (1) World Radio Conference.
9.3.98 EN Official Journal of the European Communities C 73/113

thereby promoting the prospects for the widest possible 4.2. R&D. The Committee supports the proposal to
acceptance of that approach on the global market (1). pursue R&D support on technical solutions needed for
The standardization process must involve full partici- UMTS within the Fifth Framework Programme for
pation of all major industry players representing the Research and Technological Development (1998-
manufacturing and operator interests to minimize intel- 2002) (2).
lectual property problems.
4.3. Competitiveness. The development of UMTS ETSI bears the responsibility for establishing should be led by industry. R&D objectives for an
the UMTS standard as a member of the ITU IMT2000 EU policy for UMTS ought to be set through close
family and must resolve European needs in a global cooperation between the Commission and industry. The
context. Therefore ETSI must adopt a common, open nature of UMTS is expected to facilitate the development
and internationally competitive air interface with a view of small service providers, hence promoting competition.
to its global application. Whilst flexibility of the UMTS However, EU competition law must be applied to
standard, as defined by ETSI, would be an advantage, prevent incumbent fixed and mobile operators from
it will need to be tempered by the requirement that the creating barriers to entry in the emerging UMTS markets.
standard is well enough defined to give UMTS operators
confidence that it will be available from a wide variety 4.4. Societal issues. UMTS should increase avail-
of manufacturers and that all equipment will be inter- ability of choice and lower priced services, making the
operable. ETSI open standards will minimize the risk of advantages of advanced telecommunications facilities
multiple standards fragmenting the European market. available to the mass market. But beyond the traditional
This approach will also minimize the risk of market areas, UMTS will stimulate and make possible new
fragmentation involved in the use of multi-mode hand- economic activity including tele-working, telematics and
sets with multiple air interfaces — not a preferred idea electronic commerce. These should assist the raising of
(due to possible technical difficulties and high costs). economic activity in rural areas, as well as facilitating
the implementation of environmental policies. The It is difficult to see how competition amongst development, construction, and operation of UMTS will
standards (within the UMTS spectrum bands) could create enormous job opportunities throughout Europe
work without de-stabilising the European market. The and provide substantial export opportunities. Other
experience of the US and its competing standards would societal issues will include those relevant in the telecom-
seem to bear this out. It has been generally accepted that munications sector generally, and mobile in particular:
one of the key factors in the success of GSM has been data protection, encryption, fraud and other criminal
the stability of the standard and the large number of activities, universal service obligations, physical, and
manufacturers supporting what is to a large extent an human environmental concerns (including health). In
open standard. Competition between standards would particular, when introducing new technologies, pro-
invariably mean proprietary standards, which have the ducers should give careful consideration to their suit-
major draw-back (as perceived by an operator and ability, wherever possible, for use by those with disabili-
his financial backers) of locking an operator to one ties, such as hearing difficulties. Early solution to such
manufacturer for many years. issues will contribute to the creation of a favourable
environment for market growth. UMTS is expected to bring about a much
greater convergence of the telecommunications and IT 4.5. The future. The second Commission communi-
industries. In this respect, greater participation of the cation contains an overview of recommended actions and
IT industry in the standardization process is highly time-frame: The Committee agrees with and supports the
desirable. plan for Community action (see paragraph 2.6) and
awaits the Commission’s concrete legislative proposals.

(1) Already the top four European suppliers of mobile equip- (2) Fifth Framework Programme for Research and Technologi-
ment (Ericsson, Nokia, Siemens and Alcatel) have given cal Development (1998-2002) — Commission Working
public support for a new common European platform for Paper on the Specific Programmes: Starting Points for
UMTS to be standardized by ETSI. Discussion (COM(97) 553 final).

Brussels, 11 December 1997.

The President
of the Economic and Social Committee