May 30, 2012 / 4:47 PM / 5 years ago

ETNO calls for public funds to help build telecoms networks

BRUSSELS, May 30 (Reuters) - Lobbying group ETNO, whose members include Deutsche Telekom and Telecom Italia , on Wednesday urged EU governments to team up with telecoms operators to fund the roll-out of high-speed networks as the sector grapples with falling revenues.

The slow roll-out of high-speed networks has fuelled concerns among policymakers that Europe could become less competitive than the United States and Asia. Telecoms operators also fret over the high costs involved.

Authorities across the 27-country European Union should consider using public funds, especially cash left over from other projects, the head of ETNO (the European Telecommunications Network Operators' Association) told a telecoms conference.

"Governments should exploit the many possibilities that exist to build networks or passive infrastructure where the private sector cannot arrive, using the EU structural funds," said ETNO head Luigi Gambardella.

"As regards the use of public funds, for example through public/private partnerships, we expect the European institutions to look at the benefits that they can bring in terms of helping infrastructure development," he said.

Telecoms providers may do better to wean investors off expectations of high dividends and rethink their growth strategy, Anthony Whelan, a senior Commission official for telecoms issues, told the conference.

"And for companies as for countries, high (dividend) yields, be it to bondholders or to shareholders, get in the way of the financing of potentially productive investments," he said.

"If high yields are driven by poor growth prospects, in both cases, we need to restart our growth engines in order to get favourable investment dynamics."

The European Commission, which acts as the executive for the EU, wants all Europeans to have access to broadband by 2013 and at least 50 percent of European households to be able to subscribe to Internet access above 100 Mbps by 2020.

Gambardella also echoed calls by Deutsche Telekom, Vodafone and France Telecom for a lighter regulatory hand, saying rules should be mindful of market changes.

"Industry is committed to invest but is expecting both the European Commission and NRAs (national regulatory authority) to engage in a review of their policies that takes into account current and foreseen market conditions," he said.

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