NCPA - National Center for Policy Analysis

European Phone Rates Drop As Countries Deregulate

January 14, 1999

Overseas calls have gotten cheaper -- often dramatically cheaper -- in nearly every European nation that has deregulated telephone service.

Deregulation began several years ago when the European Union began pressing member states to open their markets by 1998.

  • International-call rates have plummeted 30 percent in the Netherlands and 25 percent in France since competition was introduced.
  • Similar rates have dropped 15 percent in Luxembourg and well over 10 percent in Greece, Portugal, Denmark and Ireland since deregulation.
  • International rates in Germany have dropped 8 percent, and long-distance prices have plunged nearly 90 percent since 1997 -- while local phone competition now exists in more than two dozen cities.
  • The only exceptions to the trend toward lower rates among 15 European countries are Italy, where overseas rates have increased 0.6 percent, and Finland, where rates are up 1.4 percent.

Losing its monopoly, Germany's Deutsche Telecom has had to cut about 40,000 jobs since 1995. But competitors have created almost as many new positions and experts report more jobs have been added in related industries.

Sources: Gautam Naik and William Boston, "Phone Deregulation Pays Off in Germany," Wall Street Journal, January 14, 1999.


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