The European Commission has claimed that creating a single European market for digital communications services would give the EU economy an annual boost worth up to €110 billion (£93 billion).
European Commissioner for the Digital Agenda Neelie Croes said that European ‘digital market is currently’ fragmented along national boundaries. "We are wealthier and more competitive because of our single market," she said. "But it is not a true Single Market if the Internet and other telecoms are excluded.:
The EC’s claims are based on a study conducted last year by Dutch research firm Ecorys. Ecorys calculated that potential economic benefit from opening up national markets to telecommunications suppliers, thereby intensifying competition, would be between €27 billion and €55 billion each year.
It quoted a 2010 study by Professor Mario Monti, who was installed as Prime Minister of Italy following Silvio Berlusconi’s resignation last year, asserting that "[m]arket fragmentation leads to numerous negative effects: it facilitates the creation of market power, it prevents operators from achieving economies of scale, it slows down investment in new infrastructures and services, it reduces growth potential and hinders the emergence of European champions to the detriment of Europe’s global competitiveness.”
Added to that figure were the economies of scale that would derive from large telecommunications providers operating across the whole European market. This takes the combined benefit up to €110 billion.
However, the study also identified a large number of barrier to a unified European telecommunications market. These include the EU’s own telecommunications regulation framework, which has allows for member states to take different approaches to essential matters, and government ownership of incumbent telcos in a number of member states.