April 13, 2024
Investments

GSMA calls for new connectivity regulatory framework to accelerate long-term investment – Euractiv


On 20 March, GSMA – the organisation representing the interests of mobile network operators worldwide – published its latest manifesto, setting out reforms it believes are needed to make Europe’s connectivity ecosystem fit for the future.

With ever-growing mobile use, and innovations such as telemedicine and autonomous cars promising to make life easier for Europeans, the industry views a robust, well-funded connectivity landscape as essential. GSMA views the upcoming European elections as an opportunity to place connectivity issues firmly on the EU political agenda.

According to the GSMA, reform of the telecom sector should be front and centre. “A new regulatory framework could allow for long-term investment, recognising the need for economies of scale and enabling the fast deployment of world-leading connectivity,” said Ben Wreschner, Chief Economist and Head of Public Affairs, Vodafone Group, and Chair of GSMA Policy Group Europe, at an event to mark the manifesto launch.

Wreschner argued that with a new regulatory structure and large-scale investment, the EU could rekindle its competitiveness and technological leadership.

Fast, secure, widespread connectivity

Speaking on the same panel, Kamila Kloc, Director, Digital Decade and Connectivity, DG CNECT, European Commission, agreed: “Fast, secure, widespread connectivity is essential for the deployment of technologies that will bring us into tomorrow’s world: telemedicine, automated driving, predictive maintenance of buildings or precision agriculture.”

On 21 February 2024, the European Commission adopted a White Paper on “How to master Europe’s digital infrastructure needs.” It describes the changes facing Europe’s connectivity and aims to redefine a long-term vision on digital networks and prepare the ground for possible policy and regulatory actions, explained Kloc.

“We have identified various scenarios to help the creation of a true Single Market for electronic communications. This will help since we need a digital infrastructure that provides secure, fast, and reliable connectivity – to everyone, everywhere in Europe.”

Kloc added that the quality and performance of the connectivity infrastructure is essential to reach digital targets for the 2030 Digital Decade, and to “ensure our future competitiveness and bring the full digital innovation benefits to all citizens and businesses.”

Revising spectrum policies

On the issue of spectrum, Kloc said that the scale of the market is not sufficient, adding that “spectrum policies need to be revised,” and she sees the need for more harmonisation.

Aleksander Soltysik, Chairperson of the Radio Spectrum Policy Group (RSPG), agreed, but sounded a note of realism: “We just started analysing the scope of the White Paper. We will deliver the opinion by the end of June. Spectrum management is the sole responsibility of national regulators, but we will deliver recommendations.”

During the discussion, it was evident that all speakers agreed reforms are needed to strengthen the European telecoms industry and advance the EU’s digital ambitions. The key question was “which reforms” and “when?”

In the wider debate at EU level, some industry stakeholders have argued that excessive market fragmentation, spectrum costs and an outdated regulatory framework have caused European telco’s revenues to decrease and their market value to shrink over the last 20 years, despite significantly increased revenues across the broader internet ecosystem. Others say that the status quo is just fine.

Deregulate to promote investment

Peter Alexiadis, Research Fellow, CERRE and Visiting Professor, King’s College London offered a more revolutionary take: “The Commission’s White Paper has opened a debate on the future of the telecommunications industry. But the question is whether the vision contained in the White Paper is sufficiently radical and whether several of its stated goals are achievable.”

Alexiadis offered a more radical proposal, which would take Europe on a de-regulatory path while promoting investment incentives. “Achieving that balance is not something which can be achieved without major trade-offs being made across a range of public policy dimensions,” he said, adding: “Perhaps the whole basis for regulation needs to change.”

Alexiadis remarked that the 2002 Regulatory Framework established a forward-looking regulatory regime that based itself on competition law and the concept of “markets” and “market power.” That regime has served us well for well over two decades, he argued.

“However, the time has come to reconsider where we stand with regulation, given the fact that the 2002 Framework envisaged that, if markets worked efficiently, we could remove regulation and revert primarily to competition policy to discipline anti-competitive behaviour,” said Alexiadis.

Ambitious targets

He observed that in parallel, European policymakers have set ambitious targets for European telecommunications operators to meet digital milestones, which he argued then strains their economic resources; at the same time, Alexiadis commented that they need to be mindful of environmental sustainability goals and the implementation of additional measures, to ensure the resilience and security of their networks.

The world of 2024 is not that of 2002 – there are vastly more demands on the spectrum, on infrastructure, and on the major telco players – not least the Digital Decade targets, NIS II Directive’s cybersecurity obligations and environmental sustainability goals.

Wreschner summed it up: “At the end of the day, it’s not just about connectivity per se, but about ensuring European competitiveness. Market scale and competition are critical for the mobile industry. Competition but without imbalances. It’s not just about telecom regulation but about economic, security and sustainability regulation. We need to invest for future competitiveness.”

[By Jennifer Baker I Edited by Brian Maguire | Euractiv’s Advocacy Lab ]

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