To drive progress against 2030 connectivity targets, like-minded stakeholders urged changes to the EU’s telecoms regulation and its attitude to in-market mergers
EC making progress with gigabit broadband initiatives: Lisa Fuhr (Director General, ETNO) opened the event, outlining the telecoms sector’s role not only as an enabler of communication, but as an engine of economic growth and innovation. Teeing up subsequent discussions, she stated that operators need scale and to experience fair rules in digital markets, underlining that the rollout of infrastructure is a strategic priority for Europe. In Ukraine, connectivity is currently as crucial as anything else, added Kamilia Kloc (Director, Digital Decade and Connectivity, DG CONNECT). On fibre coverage, Kloc considered that more needs to be done to meet EU targets, particularly as the region is facing a €174bn investment gap out to 2030. The scope for this shortfall to increase in future makes the Gigabit Infrastructure Act (GIA) hugely important and something on which the EC is eager to move fast. In parallel, the EC is analysing responses on the (contentious) Gigabit Recommendation, which it is looking to finalise by September. It is also working through a significant number of responses to the exploratory – or ‘fair share’ – consultation, and might seek more data from operators having already identified some gaps in its evidence base.
It remains to be seen whether the majority of MEPs will support fair share: According to Alin Mituța (MEP and GIA Rapporteur), the act is reflective of what needs to happen to improve telecoms regulation and drive future investment. The GIA will be voted on in September, followed by trilogues in October, although Mituța anticipates areas where the EC will not be aligned with the Council (e.g. on shortening permit timelines). With Europe trailing on 5G to leading markets in Asia, Audrey Scozzaro Ferrazzini (Senior Director, Government Affairs EMEA, Qualcomm) called for urgent policy reforms, particularly given the region’s investment gap – a problem Vincent Garnier (Director General, FTTH Council Europe) was not convinced is real. However, following a suggestion that the EU is also lagging behind the US, Thomas Reynaud (CEO, Iliad) stated that he would not advocate a ‘copy and paste’ of the US situation where a large digital divide and high prices still persist. In Reynaud’s view, there should be a greater focus on copper switch-offs (under regulatory supervision) and fibre adoption, which is currently low and making for poor returns. On a fair contribution, Reynaud considered this would send an “economic signal” to big tech companies about the shared responsibility for data traffic. Ferrazzini also outlined her support for the concept, albeit with transparency and accountability mechanisms to ensure any money coming from tech giants would go to where it is needed. Mituța added that it is too early to say what will happen on fair share in the European Parliament and whether a potential EC proposal would secure the backing of MEPs.
Operators do not face a level playing field: During the second panel on digital competition, Wolfgang Kopf (Senior Vice President, Group Public and Regulatory Affairs, Deutsche Telekom) described the gulf in market capitalisation levels of US hyperscalers and EU telcos, claiming that regulation and competition law have inhibited operators from launching services and gaining scale. Petra Wikström (Director of Public Policy, Schibsted) stated that some authorities do not consider that “big is beautiful”, which Kopf said is reflected in the EC’s “stupid doctrine” opposing four-to-three mergers. Kopf argued that until the adoption of the Digital Markets Act (DMA), the EC had failed to address the growing power of tech firms. Andreas Schwab (MEP) agreed that EU legislation has not adapted well enough to market developments, but considered that the question now is how new ex-ante rules are applied. Wikström stressed that the DMA should be implemented and enforced correctly, partly to avoid the fragmentation and uncertainty caused by differing applications of the GDPR across Member States.
Splitting software and hardware components of networks supports innovation: The final two sessions considered Europe’s connectivity opportunities and challenges from a technical standpoint. Speakers observed how networks are gradually becoming more open, virtualised and disaggregated, encouraging diversity within the telecoms ecosystem and allowing operators to ‘mix and match’ suppliers. Though this enables innovation, Francesco Sorrentino (Business Development Manager, VMware) noted that overcoming some implementation challenges will require cross-industry collaboration, while Volker Ziegler (Chief Architect, Strategy and Technology, Nokia) urged Europe to leverage its strengths and champions – e.g. Nokia and rival Ericsson – to help unlock the potential of next-generation connectivity. However, according to Ingeborg Øfsthus (Nordics CTO, Telenor), “Europe has a problem”, with operators delivering crucial services but facing a low willingness to pay. The right policy framework is therefore an enabler to incentivising investment to meet growing user demands. Pearse O’Donohue (Director, Future Networks, DG CONNECT) agreed that a pipeline of investment is key. As this cannot come from government sources, it is the role of the EC and national regulators to create the conditions that attract funding from private enterprises and the financial sector.
