Select Committee on European Union Minutes of Evidence

Further supplementary memorandum by Reuters Ltd (text taken from e-mails of Ben Wilson (Public Affairs Assistant) of 20 June)


I attach (in Powerpoint) some slides put together from Tarifica's latest benchmarking report[11] which gives a snapshot of various telecoms tariffs as at 31 March 2000.

  The slides show list prices from incumbent operators in European countries for the following services: the monthly rental PSTN (for dial up Internet access) charge for a business user, the monthly rental charge for a basic ISDN service, the cost of an hour's videoconferencing from Europe to the US, and the monthly costs for national and international 64 kbit/s and 2Mbit/s leased line circuits. The slides update the ones included in the presentation we gave to the Committee on 17 May.

  It is worth noting that, by comparing incumbent (BT, Deutsche Telekom etc) list prices across Europe, we are comparing like with like. It is sometimes argued that list prices are not a fair reflection of the picture as discount schemes are offered to major users. However, it should be recalled that list prices are what SMEs pay.

  In general, the slides show that the UK continues to lag behind the rest of Europe. The leased line slides show that, although UK prices did drop between December and March, they only did so by circa 4 per cent, whereas European prices on average dropped by 10 to 11 per cent. For 64 kbit/s circuits, UK prices are still among the very worst. For two mbit/s services, the UK position has slipped from just below average to the lower end of the scale.

  The message would seem to be things are changing here, but that prices are falling faster elsewhere.

  Note: The reason we focus on these particular tariffs (PSTN, ISDN, leased lines) is that they represent three key means for businesses to access the Internet.

11   Available from the Committee Office, House of Lords, on request (020 7219 6798). Back

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