The global financial crisis may hit new telecommunications operators harder than the established firms, said EU telecoms commissioner Viviane Reding. She argued against calls for lighter regulation of the industry.
"Big companies by themselves have a lot of means to invest...but in these times it is much more difficult for new entrants," Reding told Reuters on Saturday.
Reding, attending an event in Venice organised by the European Telecommunications Network Operators' Association (ETNO), sought to persuade its members of the continued need for regulation.
"Some of you also have come to me in the past weeks and told me that now, because of the financial crisis, it would be time to soften or even to abandon telecoms regulation," she told more than a dozen chief executives of European telco operators and suppliers.
She argued the financial crisis had strengthened the case of those who argued for closer regulation of that sector.
"There is a very interesting lesson from the ongoing financial crisis for the overall perception of regulation. It is certainly not over-regulation that has caused the financial crisis," Reding said.
Reding wants to open up further Europe's 300 billion euro telecoms market with the aim to offer consumers a wider choice of faster and cheaper services.
She has proposed a package of measures on which the bloc's states and the European Parliament will have the final say.
European telecom operators do not agree, arguing current regulation hinders and delays the large-scale investments needed for new fibre access networks.
"If regulatory policy continues to constantly focus on pushing prices down, ever more capital will be withdrawn from the industry," ETNO said in a statement signed by 15 chief executives, among them Deutsche Telekom's Rene Obermann, France Telecom 's Didier Lombard and Telecom Italia's Franco Bernabe.
But Reding said past regulatory measures had proven that as prices decline, volume increases, thus sustaining revenues.
Reding also said she hoped to reach a political agreement on plans to cap prices for sending text messages and data roaming, and was optimistic about reaching a decision early next year.
The move is part of larger plan to cut the cost in the EU of roaming, making and receiving mobile phone calls abroad.
The plan is vehemently opposed by phone companies, which argue that the cut would result in a loss of up to 20 billion euros.
"If this trend continues, it risks pushing the ICT sector into an economic downturn, further deepening the recession of our global economy," telco operators said in their statement in Venice.
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