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    Home5G & BeyondIs the EU doing a U-turn on telecoms?

    Is the EU doing a U-turn on telecoms?

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    Regulation has long been blamed for holding back European telcos. Should they be careful what they wish for?

    As John Strand’s in-depth analysis of what to expect in 2023 outlines, this year feels like big shifts are coming in telecoms this year.

    One major turnaround that appears to be on the cards is the European Commission’s thinking. The veteran European Commissioner Margrethe Vestager, responsible for Competition and Digital, is calling for a single European telecoms market with only five to 10 mobile operators across the EU’s 27 markets. She claimed this is the only way to for telcos to make a return on investment, quoted in the Italian newspaper, Milano Finanza, at the end of January.

    The alternative, she said, is excessive competition which has led to a situation in which Australians pay the equivalent of €30 for 40GB of data, whereas Italians pay €5 for the same allowance. This means telcos can’t invest enough in 5G infrastructure and other things. Vestager concluded: “investments are now at risk everywhere”.

    Wrong-headed policy to blame?

    The EC’s policy of insisting every EU country, no matter how small, should have four competing mobile operators had a lot to do with that pricing, along with obsessing about the wrong things, for instance, transmission speed instead of reliability and coverage – again John Strand has quite a lot to say about that too.

    So Vestager has now concluded that the options are: consolidate at continental level; look to public taxation to fund infrastructure investment; or face “Europe’s progressive technological decline”.

    Fellow European Commissioner Thierry Breton (and former CEO of the French incumbent, France Télécom, now Orange) who is responsible for Industrial policy in the EU reiterated that the Commission’s aim is to build a single market for telecoms and a consolidated market.

    Licensing and fair contribution

    He was speaking at an event in Helsinki in February and added, “The current fragmentation in Europe with suboptimised business models based on national markets and high costs for national spectrum licences is holding back our collective potential compared to other continents.”

    Breton noted that discussions about such matters would be part of an industry consultation that would begin this month and would include an examination of whether the hyperscalers and streaming giants, such as Amazon Web Services (AWS), Google, Microsoft and Netflix, should be contributing towards the capex bills of Europe’s telcos:

    From the operators’ point of view, it’s been a long, hard road to get to these apparent turning points on consolidation and charging Big Tech for carrying its traffic. It remains to be seen if the old adage of “Be careful what you wish for” ultimately applies here. If and when the restrictions of poor and outdated regulation are removed, what or who can then be blamed if things don’t improve dramatically?