This report focuses on the deregulation and privatisation process implemented within the EU from an SMEs' perspective. Specifically the report identifies the impact of the liberalisation process on SMEs as consumers of services provided by public utilities (especially telecommunication and electricity). The expression Network Industries refers to those economic sectors whose products or services are delivered to the final customers via 'a network infrastructure'. Eight industries are usually considered as Network Industries, these are, telecommunications, postal services, energy (electricity and natural gas), transport (urban, air and railways) and water. The goods and services provided by these Network Industries have a strategic role within the economy, as they consist of the prime public utilities that are essential inputs for other sectors. Network Industries have historically been under public ownership, by the national states or other public institutions (i.e. municipalities), either directly or as public enterprises. Sometimes and depending on the countries, these industries may have been in the private sector, but in those cases, the states have adopted a variety of systems to regulate their activities, so market structures have been far away from free competition. In most cases, both network operation and service provision have usually rested in the same hands, and have been protected by a legal monopoly. During the last decades, Network Industries have been subject to a process of progressive liberalisation in many countries. This liberalisation process has comprised both deregulation and privatisation. Deregulation usually meaning the elimination of regulation no longer necessary and its substitution by new regulations in areas where regulation is unavoidable, usually allowing new entrants to the markets. Privatisation usually comprises the transference of public enterprises to private ownership. In the new situation, the legal monopoly has been reduced to cover only network operation, whereas service provision has been exposed to competition from other enterprises. The final goal of this liberalisation process is that increased competition would lead to improved levels of service and quality, as well as to lower price levels for final consumers and enterprises.
