Well before the formal act of accession, governments and regulatory bodies in the countries concerned embarked on the major task of overhauling their respective telecommunications sectors in order to achieve eventual compliance with new EU rules on electronic communications that, in theory, came into operation in July 2003.

Framework for all?
The new EU framework addresses specifics such as access and interconnection, authorisation of networks, users' rights and universal service, data protection, and local loop unbundling. In general, it provides for regulation with a light touch, allows Member States to roll back rules as soon as markets are competitive and working well, and is designed to help to ensure that services are universally available across the Union.

Given the type of the policy/regulatory journey that the new EU members had to make, so to speak, recent reports that some or all of them had so far failed to implement the new rules isn't surprising. But this non-compliance could be a cause of concern for the development of telecommunications in the CEE and the two Mediterranean countries in the immediate future, not least because the European Commission seems minded to take a hard line on adherence to the new framework.

Getting tough
In April, for example, the Commission announced that it decided to take six existing Member States - Belgium, Germany, Greece, France, Luxembourg and the Netherlands - to the European Court of Justice for failing to implement fully the new rules. "The new EU-wide framework for electronic communications is a key milestone on the road to a knowledge-driven economy", said Enterprise and Information Society Commissioner Erkki Liikanen. "This is recognised by Heads of State and Government and by the European Parliament, but these major reforms risk being undermined by the failure of some Member States to put their new rules in place on time. The lack of a clear legal framework is slowing investment and robbing businesses and consumers of the benefits of reform".

As a commentary from Serafino Abate, research director at the UK's Ovum consultancy has observed, bridging the regulatory mindset gap between the still developing markets of the CEE and the mature markets of Western Europe is quite a tough call. However, the achievement of strict compliance with the new EU regulatory framework may not constitute the biggest challenge for CEE regulators. Abate suggests the really big deal will be the way in which the individual regulators try to realise the objectives of the framework. He believes that the details of individual interconnection and wireless regulatory determinations will be critical for the successful development of the sector.

While not playing down the difficulties facing the accession states, the IDC market research company believes that their telecommunications futures are bright. In a new study IDC says that the combined Western European and CEE telecommunications markets reached a value of US$245bn in 2003, and forecast that this would reach US$281bn by 2008. While Western Europe has clearly made most of the running to date, CEE has already picked up speed. "With Central and Eastern European markets, it's important to realise that they are growing rapidly, especially with regards to mobile, as well as Internet and data services", said Jill Finger Gibson, research manager, European Telecommunications Services, IDC EMEA. "Nevertheless, most CEE countries still have a way to go, which should translate into opportunities over the next few years".