With great power comes great responsibility. Various versions of this quote were attributed throughout history to Churchill, Roosevelt and more recently to Spiderman.
We need inspiration and leadership. The reason is that today, the telecoms industry and EU policymakers share a great power and, at the same time, a great responsibility: providing Europe with 5G and fibre networks.
As we write, the European institutions are taking crucial decisions on the Electronic Communications Code, which will have a significant impact not only in enabling traditional industries but also new technologies such as Artificial Intelligence, the Internet of Things and robotics.
This is essential to ensure competitiveness and create more societal opportunities. Investment and regulation are the two key factors in delivering on this promise.
Are we investing enough?
Unleashing the full power of telecoms investment is a pre-requisite to inclusive 5G and fibre roll-out, which will in turn enable Europe’s leadership in new technologies. Today, telcos have boosted their investment effort to 47.2 billion euros per year in EU28 – with ETNO companies representing 70% of fixed investment and 54.4% of mobile investment.
However, in a globally competitive scenario, Europe still suffers from a startling investment gap, with the US investment per capita being double the European one (€193.3 vs. €92.9). What is more, this level of investment will not be sufficient to meet the Gigabit Society targets, which require over 500 billion euros in network investment between now and 2025.
This is where telecoms regulation enters the picture. According to several analysts – HSBC and Barclays among others, today’s telecom rules fail to provide enough incentives and certainty for investors to bet on Europe’s infrastructure projects.
Are we regulating the right way?
While telecom companies have the power and responsibility to boost investment, policymakers have the power and responsibility to remove any regulatory barriers to such investment. As of today, several actors have raised their concern and criticism to the Electronic Communications Code process.
35 CEOs from the telecoms industry recently stated that “there are no signals that the Code will deliver on its original ambition and support the investments required”. Similarly, Unions in the ICT sector mobilised to explain that some policy options under discussion “threaten the stability of the current framework”. A major issue that has been raised also by analysts (HSBC, EU regulation update, 4 October 2017).
The final objective of building Europe’s next digital network is too important for legislation to fail us. We need to ensure that the Electronic Communications Code leads to more investment in network roll-out.
How can we fix regulatory enablers?
In order to fix the situation, we should keep political objectives in sight. First, the Code should unequivocally support all successful fibre investment models, this includes also a definition of co-investment that does not leave behind any collaborative form of deployment.
No country and no investment model should be left behind. Second, any new measure needs to be investment-conducive. For this reason, proposals on oligopolies and intra-EU calls regulation should be dropped. They were not in the original design of the law, they lack an impact assessment or meaningful reasoning and they are expected to hit investment rather than increase it.
Finally, we should ensure we provide all digital players the same chance to innovate, by ensuring a fair and just playing field among all those who provide similar services.
Beyond just promises
In this regard, European institutions are in danger of missing out on their own promises and there is a lack of execution in their own work, that aims to support investment and genuinely drive European leadership.
There were a lot of big promises made around what a Digital Single Market should stand for and how it should be the major driver for economic growth. However, when it comes to the crunch, the opportunity to just tighten the regulatory screws seems to prove too tempting. European citizens and businesses trust that we will adequately use our powers and responsibilities to knit Europe’s next digital network.
With global competition mounting and technology being at the core of economic and societal growth, we need to deploy all our efforts and ensure the Electronic Communications Code helps Europe achieve success.
Lise Fuhr and Phillip Malloch are, respectively, director general and executive board chairman of ETNO, the association representing Europe’s leading telecom operators.