European Commission warns telcos could be heading for a “Lehman Brothers moment”

Lehman Brothers
Lehman Brothers

European Commission Vice President Neelie Kroes today stressed the need to push forward with the commission’s telecommunications reforms or risk what she described as a “Lehmen Brothers moment”.


“The fact is time is racing on: the economy is declining, technology is moving ahead and so are other parts of the world. The telecoms sector hasn’t had its ‘Lehman’ moment yet. But with declining revenues, rising debt and dated business models, I worry about that happening,” said Kroes in a speech to the European Internet Foundation this morning.

“And I worry about the consequences if it did – consequences for European ICT companies, for the governments who might have to bail them out and for the economy that critically depends on broadband connectivity. I am prepared to work with everyone to ensure this package gets delivered in time,” she added.

The plan – known as the “Connected Continent” legislative package – was launched by EU Commission President Jose Manuel and, among other changes, hopes to eliminate roaming charges by 2014, reduce red tape faced by telecom operators and give new rights to consumers. It hopes to create more of a single telecoms market in Europe.

If the current proposal is signed off by Europe’s 28 member states and the European Parliament and becomes law, the changes will take affect beginning 1 July 2014.

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Image credit:
Lehman Brothers grave – Flickr user 

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