Telecom issues in Europe are impacted by the decisions of regulators operating at a number of levels: global, European, country by country and intra-country. In principle the regulators support competition, but in practice they frequently block real changes and shield the market position of incumbent state monopolies. The EC also legislates to increase competition, but while this is working in some countries, such as the UK, it still allows particular countries to maintain local monopolies for the time being, as in Belgium and Portugal. However, as the wave of deregulation spreads across Europe there is a real opportunity for consumers to benefit from consequent downward pressure on tariffs. On an optimistic note, it is possible that all major European countries' telecoms industries will be liberalised by 2001.
Europe is a wonderful mix of countries with not only diverse cultures but very different stages of development. That is what makes it such an exciting place to live in or visit. For an Internet business, an understanding of this diversity can make the difference between success and failure. Although the attractiveness of markets will also vary according to the business concept, in general terms they can be measured by:
Income: GDP per head ranges from USD 21,213 in Germany to USD 11,423 in Greece. Generally, the higher the income the more attractive the country
Higher education: The percentage of 20 to 24 year olds in third level education ranges from 49.5% in France to 25% in Greece. The higher the educational level the faster the Internet uptake tends to be.
PC penetration: PCs per 1,000 people range from 353 in Sweden to 25 in Greece. If Greece represents an opportunity then significant offline activity may be required to enable enough people to experience the offer.
Influence vs insularity: According to the World Competitiveness Yearbook, the degree to which individual countries are open to external influences ranges from a low of 5.9 in France to a high of 11 in Ireland. If you want to sell in France, then use the French language and localise the content.
Credit/debit cards per head: Europe is at a significant disadvantage here compared to the USA where there are many more credit and debit cards available in the market. In addition this factor varies widely between European countries. Firms wishing to do business in Europe will have to enable payment by debit card as well as by credit card. Where even these payment methods are not common place, businesses will have to use more traditional forms of payment such as invoicing or introduce new forms of ePayment such as digicash.
At the time of writing the European Commission had five key eCommerce- orientated directives under consideration. These covered topics ranging from copyright, data protection, distance selling and electronic signatures, as well as the European commerce directive itself. There is considerable doubt about the implications of this legislation, particularly the extent to which it will fuel or constrain eCommerce. However, in all my discussions with entrepreneurs, none has suggested that they weren't going to start their business simply because the regulatory environment wasn't quite right. It's entrepreneurs that make businesses successful and while governments can help or hinder you shouldn't wait for them to act before making your mind up. Perhaps the most useful regulatory knowledge you require is that sellers must pay taxes in the country they are based in. This factor alone may determine your decision on where to locate your business.
Having defined a shortlist of attractive markets, you will need to assess the extent to which your business concept will appeal to them. Your concept's appeal will depend on the attractiveness of the target audience, the existing product market and the intensity of competition. Each of these elements will vary both by European country and by concept. However, at the end you should feel comfortable in justifying your choice of which markets to enter.
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