The European Commission has unveiled plans to boost the powers of national telecommunications regulators.

Under the new proposals, watchdogs would gain the power to split up the business and network divisions of large service operators. But any decision to take such action would be watched over by a single Brussels-based regulator, the European Telecom Market Authority (ETMA).

The Commission wants to create a single telecoms market for Europe as it believes this will fuel competition and provide consumers with a varied selection of cheap services.

"From today onwards, a single market without borders for Europe's telecoms operators and consumers is no longer only a dream," said José Manuel Barroso, president of the European Commission.

"Telecoms is a field where our single market can bring about very concrete results for every citizen in terms of more choice and lower prices, whether for mobile phones or for broadband internet connections," he said.

"At the same time, a single market with 500 million consumers opens new opportunities for telecoms operators – if Europe helps to ensure effective competition and consistent rules of the game."

Critics of the plans fear that giving regulators new divisive powers might discourage operators from investing in new telecoms networks. The proposals are expected to be contested by Spain and Germany, home to dominant operators such as Deutsche Telekom.

But ETMA will ensure that the tactic of functional separation is used sparingly, said Ovum analyst Matthew Howett.

"Promisingly the Commission has acknowledged that whilst it will be a useful remedy, it isn’t one that will be right for every country and so will reserve final judgement on whether or not to use it," he said.

"This is an excellent example of when the experience of the new authority (consisting of members who have already separated the access network) could guide the Commission into making the right decision.”