While panellists largely agreed on the challenges facing the sector, proposed solutions in competition policy and spectrum licensing brought disagreement
GSMA’s manifesto for the near-term future of the mobile industry
On 20 March 2024, the GSMA hosted a launch event for its Mobile Industry's Manifesto for Europe, providing its outlook on the rules needed to support connectivity in Europe through 2030. Opening the event by contrasting the telecoms industry as stagnant (and having lost 80% market value) against the rapid evolution of the mobile phone over the past 50 years, Laszlo Toth (Head of Europe and CIS, GSMA) pitched the proposal as policy to secure the future innovation of the industry and the European economy as a whole. The manifesto proposes four sets of policy recommendations to address the failing financial health of the industry and the remaining investment gaps in the EU’s Digital Decade targets:
Build scale to compete globally: revise the Merger Regulation and include longer term considerations for network investments in merger review assessments;
Spectrum policy for the digital decade: extend licence periods, limit the inflation of spectrum costs and identify increased spectrum for mobile use across mid, low and high bands;
Rebalance the digital ecosystem: ensure full implementation of the Digital Services Act and Digital Markets Act, develop equivalent rules across the digital value chain and develop and incentive for big tech firms to manage traffic more efficiently; and
Update rules to reflect the current reality: harmonise rules in security and data retention and reduce the regulatory burden on operators as supported by the competitive dynamics of the market.
Noting the timeliness of the EC’s digital networks white paper, Toth closed the presentation of the manifesto with a call for swift action in order to “stay in control of our own destiny” as both an industry and an economy competing on a global scale.
A dense discussion that got into the weeds more so than other events that have attempted to analyse the white paper
In the discussion which followed, panellists discussed the changes in competition policy needed to create a healthier industry which can ensure Europe remains competitive on the world stage. Kamila Kloc (Director of Digital Decade and Connectivity, DG CONNECT) opened her remarks by acknowledging the detailed and extensive problem statement the EC laid out in its white paper, noting operators faced difficult financial conditions amidst a single market which has failed to materialise and technological change which has destabilised the value chain of digital connectivity. Characterising the EU as a “victim of its own success” in fostering extensive competition in the industry, she suggested the path forward for the bloc could be moving away from strict and broad ex-ante regulation towards an understanding of competition regulation as a “safety net”. In agreement, Peter Alexiadis (Research Fellow, CERRE) added that the SMP regime was intended to create sustainable, competitive markets after which deregulation could occur. He cautioned however that full deregulation of the sector was “pie in the sky”, but that a discussion on the appropriate number of markets susceptible to ex-ante regulation was needed. Ben Wreschner (Chief Economist and Head of Public Affairs, Vodafone Group) urged that this focus on competitive markets be based on a specific analysis of where the threat of remonopolisation exists and where bottlenecks may emerge but could be solved by more targeted regulatory efforts. He highlighted that we no longer have a self-contained ecosystem with competition coming from different places, and rules that don’t just come as a result of SMP (economic regulation): the sector is also subject to social, security, geopolitical, and consumer policy interventions. Wrechner cautioned that shifting towards reliance on symmetric regulation shouldn’t become a case of a solution seeking a problem. The irony was not lost on the audience that a good proportion of the discussion focused on fixed networks, despite the host and organiser (GSMA) representing the mobile sector. Perhaps the most striking remark came from Kloc on the issue of overbuild: “Sometimes you don’t need three networks in one city. Maybe one or two with the right access products can do it.” More than once she returned to the scenario in which there is deregulation of the sector, and there was certainly a feeling that there is a commitment to this route from the Commission.
The approach to spectrum licensing sparked disagreement
The process for licensing spectrum across the EU was a frequent, and at times fiery, point of discussion among panellists. Speaking from the perspectives of the NRAs, Aleksander Soltysik (Chairperson, Radio Spectrum Policy Group) reiterated the RSPG’s position that spectrum allocation is the sole responsibility of Member States, and the European Electronic Communications Code (EECC) provides facilities for coordination among NRAs that are admittedly underutilised. Wreschner reiterated Toth’s earlier call that “spectrum is essential input to Europe’s competitive future, not a tax for national governments,” noting it should be “an asset not a drag.” He also proceeded to liken the peer review process to VAR review in football, suggesting that NRAs marking their own homework unsurprisingly does not find faults or force change in the process. Alexiadis and Wrechner also disagreed less fundamentally on the importance of transnational spectrum usage, as Wrechner questioned the necessity of dedicated spectrum for the purpose. Criticism was also made of attempts to create artificial scarcity in some markets by reserving spectrum for certain use cases, renewal processes that are unpredictable and access obligations for new entrants imposed via spectrum awards. In a debate that more broadly captured the concerns expressed by attendees from BEUC and ECTA, Soltysik suggested that the EECC among other policies be given time to further develop or continue working before rewriting the rulebook. All other panellists, however, pressed the urgency of the matter both in the context of spectrum and the broader approach to regulating the industry, noting that innovation and progress may not be enjoyed fully in Europe without timely action.
