Is Your PTT
Ready For 1998?

Everyone knows that the EC has mandated full cross border competition in telecommunication's services beginning January 1, 1998. That's the good news. The bad news is that the individual ministries of telecommunications have remarkably different timetables for implementing this directive, and even have completely different concepts of what competition actually means. The rationale behind the mandate is to provide all telecommunication's users with reasonably priced, full featured services. Europe is far behind today, and is less competitive economically as a result. Features and services that are commonly available from major carriers in the USA - account codes, voice mail, custom dialing plans, fax store and forward to name a few - are unusual in Europe. Even something as simple as an invoice that lists every individual call is a rarity!

The obviousness of the benefits of competition begs the question, "Why did it take so long?". The answer is simple fear of change. If your hundred-year lease on all the farm land in your country was about to expire, and the land was henceforth going to be made available to who ever could use it most productively, how would you feel? Would you be tempted to dig in your heels and fight for whatever lease extension you could get? Would you be desperately investigating ways to use your monopoly granted large bank account to upgrade your tractors, and planting methods from those you adopted in the 1960s? Would you be concerned about the potentially serious social upheaval that will inevitably follow from the radical reduction in work force?

Change is only exciting if you have something to gain from it. It's difficult to go up from 100% market share, so it's understandable that many monopoly PTTs have been less than fully enthusiastic about opening their own markets. But they do have something to gain from moving into markets outside their own country, which is the very large carrot leading them forward in the process.

And now for the report card. I've rated each Western European country from first to fifth place, where first means the country is enthusiastically embracing competition, and fifth means they are enthusiastically rejecting it. Drum roll, please . . .

Fifth place goes to: Spain whose PTT still feels they know best what services Spanish consumers want and who reacts quite negatively to even minor hints of competition. Rumblings indicate that Spain may well renege on the January 1, 1998 date for competition, preferring some more "reasonable" time frame, like 2050 or so.

Fourth place goes to: Portugal, Ireland, Austria, Luxembourg, Belgium and Greece whose PTTs at least aren't violently anti-competitive. Unfortunately they also haven't done much internally to prepare for the inevitable, so they risk an unpleasant awakening in the near future.

Third place goes to: Germany, Switzerland, France and Italy. Although the inhabitants of these countries have yet to see any real benefits from competition, their PTTs are quite serious competitors outside their own countries, so they'll be ready for the invasion.

By Cliff Rees

Second place goes to: Denmark, Finland and Norway–whose PPTs have begun to seriously reduce prices and introduce higher levels of service. They'll be well placed in 1998.

First place goes to: UK, Sweden and the Netherlands–where competition is already a reality. British and Swedish consumers have multiple carriers to choose from with a result in low rates and a wide variety of services. Essentially everything is legal in the Netherlands, so it's not surprising that there are a multitude of small providers springing up even though competition is still technically against the law.

The Federal Communication Commission in the US found that increased competition increased the telecommunication's services available and reduced the cost of long distance calling. The result has been increased communication, increased commerce and an increase in the GNP.

It's really simple. Those countries which give their citizens and businesses the most competitive telecommunication's market will benefit the most, and from 1998 onwards will have a consistent advantage over other European countries.

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