Driving growth through the mobile economy
The mobile economy has the potential to drive Europe's economic recovery but it needs industry and European institutions to work together, in order to streamline regulation, encourage market consolidation, deliver data protection reform and spectrum harmonisation, writes Tom Phillips.
Tom Phillips is chief regulatory officer of the GSMA, which represents the interests of mobile operators worldwide.
The Italian EU Presidency has put telecoms reform on its priority list and rightly so, given the profound impact that mobile technology has on the daily lives of European citizens and the region’s economy.
With smartphone penetration in Europe among the highest in the world, delivering information, entertainment and business support at every waking moment, mobile is becoming an everyday essential for millions of people across the continent. As a result, the mobile industry is one of the driving forces behind Europe’s economic recovery, enabling efficiencies in many sectors.
However, European operators continue to face growing challenges that may hamper their ability to help drive growth, jobs and innovation. There is an opportunity for the new European Commission and Parliament to work hand-in-hand with the telecoms industry in order to address the most pressing issues, including a need for more streamlined telecoms regulation, market consolidation, spectrum harmonisation and a new framework for data protection rules.
Modernising regulation is key to the future success of Europe’s telecoms sector. Although there will inevitably be compromises where numerous and differing shareholder opinions need to be addressed, Europe’s new policymakers should have regulatory harmonisation firmly in their sights, as well as focusing on the elimination of outdated and unnecessary layers of regulation. The main priority needs to be on building points of convergence for the good of consumers, industry and the wider economy.
Mobile technology is at the heart of Europeans’ daily lives, but it will only serve the continent’s growth if a modern telecoms infrastructure is in place. In order to ensure the deployment of next-generation technology and fully exploit the potential of 4G, the EU’s methods for merger control should be reassessed and realigned with the goal of reinvigorating the investment climate to help refuel competitiveness.
For instance, the recent approval by the European Commission of Telefónica’s takeover of E-plus in Germany is a positive signal to the European telecoms operators, creating hope for further consolidation of the highly fragmented market. However, while the decision to allow the merger to go ahead is welcomed, there remains the need to reduce constraints on market-driven restructuring.
Harmonised regulation at the single market level is urgently required in the realm of spectrum policy, revolutionising the way it is currently managed. A further release of spectrum for use in mobile services is another critical step for maximising the economic benefits of precious radio frequencies. As evidenced by a recent GSMA study, mobile’s use of spectrum contributes to the budgets of EU member states far more than any other use of this sought-after resource.
We support an open internet where network traffic is managed to ensure data flows efficiently and securely to customers, providing great consumer experiences and helping business compete in the global knowledge economy. However, certain EU regulations proposed in Brussels threaten the effective management of the network that underpins the internet. Europe needs smart regulation to safeguard the open internet, which will spur on the development of customised services, catering to the needs of a variety of users and stimulating high network investment.
Last but not least, it is essential to replace the current patchwork of privacy regulations with consistent rules that can provide protection for all Europe’s citizens. If new rules are applied equally to all players in the internet ecosystem as part of the EU’s data protection reform, consumer trust in mobile apps and services will be reinforced.
The telecoms sector has the potential to be the linchpin of Europe’s growth and innovation, as proven by its previous track record. Critical challenges lie ahead for the new European Commission and Parliament as they start their new mandates. The telecoms industry offers itself as a valuable partner in this process, ready to work together with the new decision-makers to help find solutions that will bring long-term benefits for the European economy.
In his bid for the presidency of the European Commission Jean-Claude Juncker emphasised that Europe’s path to growth is paved with tablets and smartphones, but first it needs a truly single digital market. We are confident that the next leadership of the European Union will prioritise a truly connected continent, re-establishing Europe’s position at the forefront of digital technology and innovation.