Fast growth in digital services is bringing enormous social and economic benefits to customers the world over. But market regulation must be adapted to the 21st century if this sector is to achieve its potential, writes Daniel Pataki.
Daniel Pataki is the Vice-President for Policy and Regulation of GSMA, the association of mobile operators.
Mobile connectivity and the digital ecosystem have generated huge benefits for consumers and society. The mobile revolution is bringing connectivity to all corners of the globe at unprecedented rates and, as a result, prices for digital services are falling rapidly. More than three billion people are currently connected to the internet; meanwhile a further one billion mobile internet subscribers are predicted by 2020.
Rapid technological progress and growth spurred by digitisation have created tremendous benefits for consumers, such as more connected lifestyles, financial savings and greater convenience, and they are also the foundation of national economies.
The collective growth in mobile broadband access, smartphones and internet technology has fostered new mobile voice and messaging communication services, with the emergence of powerful internet players and digital platforms. While these new services compete directly with traditional communications services, including those offered by mobile operators, they are not subject to the same rules, including those focusing on the collection and use of customer data.
This poses regulatory challenges for policy-makers in Europe and around the world. There is no place for analogue rules in a digital world. The failure to adapt to a changing digital environment can distort competition, stifle innovation and negatively impact consumer welfare.
Today’s dynamic and competitive markets require more non-discriminatory and technology-agnostic policies. Reforms are needed to ensure that consumers continue to benefit from innovation and investment, while being protected, regardless of the type of the company or technology providing the service.
A new report published by the GSMA explores how the pace of policy and regulation has failed to match the speed of change in the digital world, and calls for collaborative planning and shared rules that apply to all communication service providers. It recommends that policymakers should incorporate three key principles as they work to modernise regulatory frameworks.
Firstly, regulatory objectives can best be met by focusing on the services delivered to consumers, not the type of company or technology that delivers them. Secondly, measurable, performance-based approaches should be favoured over prescriptive regulations, promoting market dynamism and focusing on consumer welfare. Finally, policy-makers should take a fresh look at legacy rules and discard those that are no longer relevant, applying a consistent set of criteria throughout the ecosystem.
A new regulatory framework based on the above principles will be inherently market and technology neutral, cost-effective, and flexible, allowing markets and technologies to evolve while preserving and enhancing regulators’ ability to achieve the functional objectives of regulation. Most importantly, it would ensure that consumers continue to enjoy the benefits of technological progress as well as the protections brought about by well-designed regulation.
In order to keep up with fast moving technological advances, industry leaders need to have an informed, constructive and evidence-based dialogue with regulators, policy-makers and other players in the digital ecosystem to promote the rapid reform of outdated regulatory systems. In this way, Europe’s dynamic and competitive digital landscape will truly benefit and protect consumers, as well as foster future economic growth across the region.