Calls for cross-industry collaboration, and a modern regulatory landscape were the asks from policymakers in a bid to revitalise Europe
Keynote 1: Open Gateway
The opening keynote of MWC 2024 sought to strike an optimistic tone, with mentions of the huge potential of technology and the benefits that will be realised by industries working together. Mats Granryd (Director General, GSMA) highlighted the role connectivity plays in bringing people together, as well as the success of the Open Gateway initiative – launched at last year’s event – that is supporting the development of new digital services. Through this scheme, Orange has now launched two APIs, focusing on ensuring number verification and on tackling SIM swapping to protect customers from fraud. Christel Heydemann (CEO, Orange) stated that she is seeing urgency across sectors to form partnerships and that the operator is keen to be a platform for that. Similarly, Margherita Della Valle (CEO, Vodafone) considered that it is vital that operators change their model and cooperate with stakeholders as the telecoms industry embarks on its next adventure, namely the ‘industrial internet’.
However, it would not be MWC without calls for policymakers to do their bit. Granryd stated that industry is challenged by a lack of growth and a widening investment gap. 5G may be the fastest growing mobile generation ever but revenue growth is declining year-on-year while capex continues to rise. Della Valle urged for a ‘regulatory reboot’ to drive investment and competition policy that allows operators in a given market to reach the right level of scale. Policymakers want a competitive and thriving Europe, but achieving this means them changing direction. The phrase ‘fair share’ was conspicuous in its absence having been at the centre of executives’ speeches 12 months ago. José María Álvarez-Pallete (CEO, Telefonica) only went as far as to suggest that the largest content and application providers, of which a handful represent over half of total data traffic, practise a responsible use of the network – something they may need to be motivated to do. While stating that now was the time for cooperation, Álvarez-Pallete outlined his wish for fair governance and a modern regulatory landscape to deliver a mutually-beneficial value chain and a much more balanced ecosystem.
Keynote: Changing the DNA of our connectivity infrastructure
In a special keynote address, Thierry Breton (Commissioner for Internal Market, EC) detailed the ambitions of a forthcoming Digital Networks Act in the context of the new and emerging technologies on showcase at MWC. Citing the connectivity and particularly the latency requirements of AI, IoT and edge computing solutions, Breton laid out three pillars for “changing the DNA” of Europe’s connectivity infrastructure:
Investing in research and development to improve the EU’s global competitiveness in tech and telecoms;
Creating a digital single market with a future-oriented regulatory framework that levels the playing field; and
Protecting digital network infrastructure to make it resilient and secure.
This vision for an EU that leads globally in developing innovative use cases for emerging technologies relies on the ability of pan-European operators to achieve economies of scale and avoid fragmented regulation among Member States. He outlined how a better harmonised digital single market should include spectrum policy that rewards operators with the most ambitious rollout agendas instead of the highest bidders and a safety net for competitive safeguards. Meanwhile, he gave a nod to the reform of the ex ante regulation of the sector already underway with the Gigabit Infrastructure Act and the Gigabit Recommendation.
How much spectrum is needed for the 6G era?
In a session dedicated to spectrum, representatives from the vendor and regulatory communities gave their take on how and what would be needed to deliver future 6G services. Cristina Data (Spectrum Director, Ofcom) expected that spectrum will continue to be crucial for industry but that the challenge now is identifying more of it. She said that lots of spectrum has been awarded to mobile but there is a need for regulators to think differently, considering different demands (e.g. geographic, indoor versus outdoor) and encouraging greater sharing to optimise use of the resource. Marie Hogan (Head of 6G Portfolio Strategy, Ericsson) agreed with the need to consider greater coexistence. She acknowledged that there is no ‘free’ spectrum left, which means regulating and employing it in a clever way. Eiman Mohyeldin (Head of Spectrum Standardisation, Nokia) stated that 6G use cases should be built on the principle of ‘sharing by design’ but also that, besides existing spectrum, 500-700MHz more is needed per operator to avoid capacity constraints. When asked to predict what spectrum would be utilised for initial 6G deployments, panellists all considered that 7-8GHz could be a suitable pioneer range.
Keynote 2: The digital vision for telcos
The day’s second keynote panel recognised the plethora of use cases for AI for telecoms but cited a shortage of skilled talent and a need to return to profitable growth as key obstacles. Tim Hoettges (CEO, Deutsche Telekom AG) began the session by detailing the 400+ use cases that DT has identified for AI tools across its operations, leading to improved customer experiences, greater energy efficiency, a more productive rollout of fibre and enhanced network stability. While agreeing that AI will dramatically change the way firms will operate, Mike Fries (CEO, Liberty Global) contrasted Liberty Global’s approach, noting it would focus on the effective and thoughtful adoption of AI with a greater degree of ethical input given that AI regulation is not yet in force in most of the world. In order to leverage AI successfully, panellists, including Frehiwot Tamru (CEO, Ethio Telecom), stressed that more attention would need to be paid to the training, recruitment and retention of skilled workers across the sector. When asked about the need to enhance revenues among the industry broadly, Vicki Brady (CEO, Telstra Group Limited) issued a collective call to action for operators to better communicate the value of connectivity to regulators and governments. Without operator investment in connectivity infrastructure including through the embrace of AI solutions, the entire economy would lose out on the benefits of these technologies too.
Keynote 4: Europe’s New Horizons
In a highly billed panel of Europe’s four major operators there were calls for a new deal for European telecoms largely based on the ability to consolidate and collaborate across borders. Opening the panel with comparisons to the US and China, Tim Hoettges (CEO, Deutsche Telekom AG) questioned how the needed network investments in European connectivity can be made in the face of low average revenue per user, low return on investment and limits on in-market consolidation. He did so standing against the backdrop of an AI generated image of a sick Europe. José María Álvarez-Pallete (CEO, Telefonica) picked up the conversation by highlighting how the much discussed €200bn investment gap in infrastructure funding is ultimately a hurdle to developing a new and deepened sort of connectivity that will allow Europe to better compete globally. Christel Heydemann (CEO, Orange) further highlighted the history of European operators in delivering on public policy goals such as improved network resiliency and more sustainable economies. Closing out the opening presentations with a direct call to regulatory action, Margherita Della Valle (CEO, Vodafone Group) proposed five immediate changes needed in the European regulatory framework to achieve connectivity goals:
Allow more scale through consolidation;
Adapt regulation to market realities;
Shift spectrum fees to network investment;
Ensure fairness in the digital ecosystem (same service, same rules); and
Include telecoms networks in the EU taxonomy.
When each operator was asked about pending or recent deals to consolidate within markets, all echoed that investment in network rollouts was not possible without the ability to achieve economies of scale. Della Valle returned to the inefficiency of the development of parallel (5G) network infrastructure while assuring that consolidation in network infrastructure does not necessarily result in consolidation at the retail level. She drew parallels to roads and energy as examples of where people would better understand the arguments being made. Hoettges similarly pointed to the US as an example where consolidation led to improved consumer outcomes with lowered costs and a world-leading 5G network. He warned against competition authorities regulating for new market entry over, and over again and pointed to where DT had exited the market in the face of this. For Heydemann, consolidation is also about the quality of the competition – i.e. the ability to establish scaled connectivity challengers. Beyond consolidation, Álvarez-Pallete also referenced the current framework for the ex ante regulation of markets as obsolete, noting that the rules based on the regulation of incumbents in copper networks were targeting yesterday’s markets while stunting progress deploying next generation technology.
Della Valle and Hoettges both took aim at current spectrum policy in Europe – likening the licence based approach as preventative for operators to own the real estate they compete on. We heard how in Germany, the government had collected €65n in auction revenue since 2000, and the impact this is likely to have had on the ability to deploy networks and maintain good customer service. This was contrasted to the US where those assets are owned outright and a functioning market exists for spectrum trading.
Ultimately the panel offered a strong and unified call to action for European regulators, stating that reform was needed immediately if the continent wants any chance to compete globally and to have any chance at creating the prized digital single market. Álvarez-Pallete described it as a ‘desperate rallying cry’ to let the industry compete and do its job and not a therapy session for Europe’s operators. He called for something radical to happen, and right now. Breton’s white paper was welcomed, but the speed of change was lamented – particularly given the pace at which AI has been developing. In the meantime, Hoettges suggested the sector is losing the trust of the capital markets and that trust needed to be rebuilt with investors.
Elsewhere around the conference on day 1
In an interview on artificial general intelligence, Demis Hassabis (Co-Founder & CEO, Google DeepMind) considered the role big tech plays in developing but also governing AI for the public good. When asked about safeguarding the public from the use of AI by bad actors, he noted that Google was one of the first big tech companies to publish a code of ethics for its AI systems but stressed the importance of including government, civil society and the public in making decisions about how AI should be governed. He also discussed how the exponential increase in the power of open source models could quickly put increasingly dangerous tools in the hands of the wrong parties.
During a discussion on investment, panellists voiced concerns heard elsewhere at the conference about Europe lagging behind countries in Asia in the rollout and adoption of 5G, with external factors (such as the pandemic and supply chain challenges) impacting network deployments. Stephen Douglas (Head of Market Strategy, Spirent Communications) suggested that industry may have shot itself in the foot by setting aspirational targets for 5G that were misaligned with market realities. Mikael Schachne (CRO Enterprise, BICS) stated only 50 operators have now launched 5G SA, reflecting the amount of work left to do. He considered it was down to industry to keep investing to unlock the potential value of 5G – a suggestion that other speakers on day 1 argued would not materialise without a genuine regulatory reset.
