Major operators have benefited from current prices, leaving alternative providers at a disadvantage, ECTA chairman Tom Ruhan will say in a letter to be sent to Kroes on Tuesday and obtained by Reuters on Monday.

"It should therefore be a concern to policy-makers that current pricing rules have not led to sustainable competitive markets from a financial perspective," the letter will say.

Ruhan cited data from a 2010 study by London-based consultants Analysys Mason which found the profit margins of Europe's largest entrants had consistently trailed those of dominant players and were negative in many cases.

ECTA's letter will come as the European Commission considers pricing guidelines for next-generation fibre optic networks due to be announced later this year.

Kroes, in charge of telecoms issues at the EC, said last year she might tell telecoms companies to lower access charges to copper-based networks to force them to invest in fibre optics.

Telecoms companies have fought back. Last week, Vodafone chief executive Vittorio Colao said the Commission had an "auto-pilot regulation mentality", adding that regulatory intervention could hurt investments and growth.

ECTA members include Bouygues Telecom, BSkyB , Cable & Wireless, Swisscom's Italian broadband company Fastweb and Vivendi's SFR.

The telecoms industry needs more regulation rather than less, Ruhan will tell Kroes.

"It is not clear that, if faced with a further serious set-back due to inadequate regulation, that investment in competitive telecoms would ever recover," he will say. "All that is needed now is your commitment to remain firm in defence of Europe's consumers and competitiveness."

• A Permanent Economic Emergency