Visit by Turkish journalists Brussels, 1 st February 2005

1. EU policy for electronic communications:what does it mean for Turkey?Richard Harris, DG Information Society Visit by Turkish journalists Brussels, 1st February 2005

2. Agenda A short talk from an EU point of view covering, Turkey's formal relationship with the EU, what this means for telecoms, how this might be affected when accession negotiations begin and, finally, some current issues in EU telecommunications • The context – commercial • A lost decade - 1990 to 2000 • What is the motive - who has the initiative? • Monitoring the markets • Topical issues

3. Context – 1990s telecommunications sector • Liberalisation of telecomms had already begun • The “Information Society” gained currency • GSM and Internet technology arrived • Remaining EU monopolies abolished 1st Jan 1998 • GATS was made, including the telecomms annex • For C&EE telecomms the rate of change was huge

4. Context – 2000 telecommunications and IT • Lisbon agenda - eEurope action plans • Third generation mobile technology arrived • The Internet bubble burst • 2002 package, designed for an open market • 10 new members joined the EU 1st May 2004 • Slow progress in Turkey

5. Preparing for accession • Abolition of monopolies in line with treaty obligations or with GATS - whichever is sooner • Implementation of market opening and of an effective regulatory regime • Full transposition and implementation of the acquis before accession • Promotion of knowledge based economy • Use of EU aid programmes where needed

6. Regular report - 2004 • There is a certain level of alignment with the acquis. • Full market liberalisation was achieved at the end of 2003 in legal terms. • Further efforts are essential to complete the regulatory framework and to implement and enforce the rules in relation to the large powerful companies. • The progress achieved in some markets, such as mobile telephony or internet service provision, could not be achieved in all telecommunication services. • Turkey needs to take further steps in order to achieve genuine competition in all telecommunication markets.

7. Monitoring the markets • Annual implementation reports by the Commission – for Member States • Monitoring of regulatory aspects for 13 candidates is available as a multi-client commercial service • Monitoring of commercial aspects was done for two years under a special contract for 13 candidate countries • Monitoring for the present 8 candidate and potential candidates is now starting under a special contract

8. Telecommunications market indicators

9. Telecommunications market indicators

10. Telecommunications market indicators - 30/6/2003 ?

11. Telecommunications market indicators - 30/6/2003 ?

12. Telecommunications market indicators - 30/6/2003

13. What next? • 10th Implementation report published in November • Next EU enlargement in 2007 • New external agenda: • EU candidates - BG, RO, TR, HR • West Balkans - ALB, BiH, MK(FYRo), SCG • Neighbourhood - Belarus, Moldova, Ukraine, Mediterranean countries, Caucasian republics • Russia – treated separately

14. What might this mean for large operators? • Liberalisation is not an end in itself (and not a formula for making easy money). • It is a key building block of the Information Society • NRAs will have the powers. To avoid heavy regulation, large operators need to help policy makers without being forced • When EU ministers meet, they no longer discuss liberalisation – this is history • They discuss cartels, spam, IPRs, the digital divide, universal service, eGovernment, how to promote broadband access and security

15. What is the EU doing? • Liberalisation of telecommunications • One framework – many situations • eEurope action plans – Lisbon • Education • Content • Trust and confidence • National broadband strategies • Common elements of strategies • Supply side policies • Demand side policies

16. Broadband penetration rates – EU15

17. Broadband penetration in the New Member States (January 2004)

18. Broadband take-up by technology in the EU15 - July 2002 to January 2004

19. DSL and cable modem coverage in the EU15 (December 2003)

20. Conclusions - broadband • Growth of broadband has accelerated • Wide differences between countries • Most growth is in DSL and cable TV • Other technologies are in evidence • Even rural areas have 50% accessibility • Scope for increased take-up is high

21. What might all this mean for Turkey? • The political dialogue continues • Turkey needs success regardless of the EU • Accession negotiations could be helpful • Turkey has some unique problems but there are useful lessons to be learned from elsewhere • Continuous monitoring and comparison • Turkish authorities cannot be compelled by the EU • Industry must be active and constructive

22. What might all this mean for Turkey? • Most important to achieve successful market opening • Settle the future of Turk Telekom, encourage inward investment, credible regulatory regime, benefits also for the EU • Monitor progress in the EU, through the Cocom and the newly emerging ERG/IRG network • EU regulatory framework is based on competition law. No room for NRAs to depart from this • Meantime, make full use of the formal dialogue with the EU under the association agreement

23. Thank you for your attention richard.harris@cec.eu.int For more information: See - Europa web-site

24. For more information europa.eu.int/comm/enlargement/index_en.html europa.eu.int/comm/external_relations/ europa.eu.int/comm/world/enp/index_en.htm europa.eu.int/information_society/topics/ecomm/index_en.htm europa.eu.int/information_society/topics/ecomm/all_about/implementation_enforcement/index_en.htm europa.eu.int/information_society/topics/ecomm/all_about/international_aspects/main_areas_work/eu_enlargement/index_en.htm europa.eu.int/comm/competition/liberalization/others/#telecom trade-info.cec.eu.int/doclib/cfm/doclib_search.cfm?action=search www.wto.org/english/tratop_e/serv_e/serv_e.htm