Having considered 50 of the initiatives operators have put in place during the course of the pandemic so far, we estimate £940m of support has been made available. These offers of support fall into four broad categories – those for all customers, those for the most vulnerable, those for key workers, and those to help businesses recover.
As European consumers eagerly take-up data-driven services and increasingly communicate across digital channels, telcos are delivering increased value and improved service to their customers. This is the main take away of the new study “Delivering Consumer Value in Digital Times”, unveiled today by Assembly – the independent, London-based analyst firm – and ETNO – the Association representing Europe’s leader provider of digital networks and services.
The UK government today announced in the event that the UK leaving the EU without a deal, the costs that EU mobile operators would be able to charge UK operators for providing roaming services would no longer be regulated after March 2019. This would mean that surcharge-free roaming could no longer be guaranteed.
Ofcom has outlined a package of proposed measures to support long-term investment in full-fibre networks. They include regulating business and residential markets together, plans for unrestricted access to Openreach’s ducts and poles, different regulatory approaches in different parts of the country and extending the duration of regulation from three to five years or more.
The European Commission has today fined Google €4.3bn arguing the company engages in illegal practices regarding the Android operating system in order to strengthen dominance of Google search. The EC notes Google has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store); paid large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and prevented manufacturers wishing to pre-install Google apps from selling devices running on alternative versions of Android that were not approved by Google (so-called "Android forks").
Today is the day in the US when the FCC’s Restoring Internet Freedom order takes effect. It is the order which repeals the previous Open Internet Order of 2015, and reclassifies broadband as an information service rather than a telecoms service to keep it away from what the FCC calls “heavy-handed” regulation.
On 6 June 2018, the EU announced a political agreement on the long-awaited European Electronic Communications Code. Stakeholders across the board are unhappy; however, the favourable treatment of wholesale-only networks could solve some long-standing problems facing wholesale access regulation over the last 20 years.
The most talked about day of the last two years is almost upon us. The European General Data Protection Regulation (GDPR) will come into force tomorrow, promising much stronger rights and safeguards for users’ personal data. For now, the main effect it has had has been, paradoxically, to irritate the very people it is supposed to protect, due to the deluge of emails we have all received from companies seeking fresh consent. While businesses fear GDPR’s hefty fines, it is likely that regulators at least will be flexible in the first few months.
Ofcom has today announced the outcome of the principal stage of its auction to release airwaves for 4G mobile and future 5G services in the 2.3GHz and 3.4GHz bands. In the auction, Vodafone spent the most of all operators, O2 acquired all of the available spectrum at 2.3GHz and and BT/EE's share of spectrum fell as per the auction rules.
Matthew Howett, Founder & Principal Analyst at Assembly comments:
"Despite Three having made the most noise about the rules of the auction, it was perhaps O2 that had the most to lose, being the operator that probably needed more spectrum the most. The outcome is a particularly good result for them.
Even though the auction raised a fraction of the amount of the 4G auction or even the 3G auction two decades ago, the prices paid are above expectation which shows how valuable these airwaves are to operators, particularly given the emerging hype around 5G.
However an unsatisfactory outcome in this auction was never going to necessarily spell the end to any one operators 5G future given that the technology will ultimately work across a number of spectrum bands, both new ones and ones already held by the mobile operators."
The European Commission has today launched a new proposal to adapt the taxation system of the digital economy, in which value is created in countries where a business does not have a physical presence. The EC proposes to introduce a taxable “digital presence”, fulfilling one of three criteria (at least €7m turnover per year in an EU country; more than 100,000 users in a member state in a year; or more than 3,000 business contracts in a state in a year). It also proposes an “interim tax”, which will apply to revenues created from online advertising.
Luca Schiavoni, Senior Analyst at Assembly, comments:
"The idea of a digital tax has been a long time coming, and, while it might not be welcomed by big tech companies, it is hardly a surprise. So much so, that some of them were already changing the way they book their income to pay taxes where they make their profit (for example, Facebook started doing it for some countries in 2016).
Today’s proposal of the EC will nonetheless face significant obstacles. Despite many member states’ appetite for a taxation system which allowed them to get more out of big tech, some countries with a lower corporate tax rate will no doubt try to amend it. Other stakeholders are also concerned: EU E-commerce businesses have already warned about a revenue-based tax for digital platforms, which would turn into an export tax for EU SMEs.
The EC is launching this proposal at a time when the OECD has come up with a comprehensive report on the same topic, which points to the risks of economic distortion and higher costs for business. The Commission is trying to act quickly (more quickly than the OECD itself), which is aiming to have an agreement in place by 2020. However, given the wide disagreements, it might end up being a fruitless effort – even the interim tax will have to be agreed upon by member states, which will take time.
Commissioner Moscovici also stressed that the interim tax is not against “GAFA” (i.e. Google, Apple, Facebook, Amazon) or against US firms; however, those companies are likely to be the ones most affected. While on the one hand this strengthens American concerns about tax; on the other it shows the underlying problem of European firms still struggling to compete with the world’s online giants."
On 6 March 2018, Telecom Italia (TIM)’s board approved a plan to move the company’s fixed network assets into a legally separated entity, which will still be part of the group and will be 100% controlled by TIM. According to the plan, access to the network will be granted through a ‘one-stop-shop’ access point for regulated and unregulated wholesale services for all operators including TIM, delivering a 'fully neutral and equivalent' model.
Luca Schiavoni, Senior Analyst at Assembly comments:
“Several factors contribute to TIM’s decision. It is perhaps striking that, despite the currently changing political landscape in the country, the board decided to approve the plan without waiting for a new government to take power. On the one hand, this is because nearly all the main political parties in Italy have taken the stance of the need to have a separated fixed network, which means that political pressure for this to happen would have likely continued under the new parliament. On the other, the market in Italy is evolving in such a way, that it is now a good time for TIM to make the spin-off.
In particular, the rise of wholesale-only provider Open Fiber has, for the first time since the liberalisation of Italy’s telecoms market, put significant pressure on TIM’s future wholesale revenues, currently around €2bn per year and forecast to decline by about a third by 2022. Alternative operators quickly warmed to Open Fiber’s arrival on the market, which is now starting to give them an alternative to TIM’s network. For years, these operators have raised concerns about access conditions and TIM’s way to satisfy their access requests.
For now, it is hard to make predictions about ownership of the network. TIM will be the sole owner for the time being, though political pressure and changes in market conditions could result in new investors (both private and public) coming into the netco. It will take at least one year before things become clearer on this front.”
