EPP-ED Public Hearing: Telecom Package Roland Doll, Vice President International Government Relations, Deutsche Telekom AG Brussels, March

Deutsche Telekom in Europe… Hungaria Slovakia Czech Republic Poland The Netherlands Great Britain Germany Macedoni a Portugal Spain Italy Belgium Turkey Russia Denmark Sweden Austria Switzerla nd Operation of Fixed and/or Mobile networks Provision of integrated ICT solutions for business costumers Monteneg ro Croatia

* EU-5, The Netherlands, Sweden ** Korea, Japan (2007 figures n.a.) Source: IDATE (2007) Number of fibre-based connection subscribers (IDATE 2007) Subscribers in Mio Europe* USA Asia** Asia and the US successfully extend their fiber- based infrastructure

Europe lags behind competing economic regions in terms of Telco- investments. Per capita levels are 50% higher in the US than in Europe. In addition, investment rates in the US are rising due to consistent deregulation. Result: the investment gap is widening. *EU-15 **Japan, Korea Source: OECD (2007) Telecommunications-Investment per capita (OECD 2007) US Dollar Asia** USA Europe* Investment levels in telecommunications - Successful turnaround after deregulation

Limits on Internet access capacity will eventually hamper innovation and growth. 1) nemertes research, The Internet Singularity, Delayed: Why Limits in Internet Capacity Will Stifle Innovation on the Web, November

Deregulation intended by Review 99 has not been achieved despite competitive market development. Chart by European Commission, DG Infso, Nov. 2001, road show on the Review

Conclusions The European Telecoms sector faces major challenges: against the backdrop of shrinking revenues in the sector, new fibre based access networks and next generation mobile broadband networks have to be rolled out to secure Europes competitiveness in the next decade. Europe lags behind East Asia and North America in the deployment of high- speed next generation access networks and in overall investment levels. Rapid increase in data traffic will lead to a multiplication of capacity required by consumers and businesses from fixed and mobile networks. The regulatory concepts of the past have been successful in opening up former monopolistic markets but they are not adequate for stimulating investments in new fibre based access networks. The review must give answers how to adapt the regulatory regime to the investment challenge facing the industry. If we want to stimulate growth in the telecommunications sector with positive spill over effects for the entire EU economy, deregulation must now be implemented, instead of further extending regulation. In order to achieve such a move towards the application of general competition law, legally binding exit rules are needed.