More reforms are needed to increase the competition on the European Union's telecom market despite progress made, the European Commission said on Thursday.

In its annual report on the telecom sector in the 27-nation bloc, the EU's executive arm said that European consumers continued to benefit from lower prices and innovative services as a result of good progress in the implementation of Europe's telecoms rules, but more has to be done to reap the full benefits of the internal market.

"Whilst 2.3 percent growth of the sector and 5 percent additional investment are good, they are not good enough in times when Europe's competitiveness is a stake," the EU Commissioner for Telecommunications Viviane Reding said. "This is why this year's reform of the EU's telecom rules must focus regulation on those key bottlenecks where competition is still not effective."

The Commission is expected to present a formal proposal this summer for overhaul of the current EU telecom rules, supporting a rapid move towards a single European telecom regulator, new laws to open up Europe's radio spectrum market and more antitrust rules to increase competition.