Powerhouse Europe-based telecoms leaders – Ericsson, Nokia, and Vodafone – have joined forces to warn of the consequences for European digital competitiveness if recent political and policy discussion momentum is not followed by timely concrete actions.
In a rare joint editorial opinion piece between Europe’s two telecoms’ vendors and the pan-European communications service provider Vodafone, the companies highlight investment, industry-supporting regulation, and consolidation among areas for action.
Signed by the heads of the companies’ respective government and policy departments (Andrew Lloyd, Ericsson; Marc Vancoppenolle, Nokia; Ben Wreschner, Vodafone) the editorial appears in the September 3 edition of the politics and policy publication, Politico Europe.
The signatories say their calls for action are in line with the proposed EU Digital Networks Act ambitions, as outlined in the February 2024 European Commission proposal on future digital infrastructure.
While welcoming recent recognition about the need for a new digital infrastructure approach – including by European Commission President, Ursula von der Leyen, and former Italian prime minister, Enrico Letta – the signatories say action timelines are key if Europe is to compete and benefit in the digital economy. The new term of the European Union, they say, presents the ideal catalyst opportunity.
The companies say the need for urgent action is highlighted by the fact that Europe already lags other global regions in the deployment of mid-band 5G (the EU Commission’s own assessment shows high-quality 5G networks only cover half of EU territory) and development opportunities in areas such as artificial intelligence (AI) and quantum technology.
“Europe now needs to see these statements evolving into clear-cut plans and concrete action that fosters innovation, attracts investment and delivers a true digital single market,” they say.
INDUSTRY CHALLENGES
The joint editorial highlights some of the issues curtailing digital transformation in the European telecoms sector.
“Operators have been subject to extractive spectrum auctions sometimes reaching costs in the hundreds of millions, often made worse by short license durations. Where operators have sought to gain scale through consolidation to facilitate greater investment in infrastructure, they have sometimes faced distortive remedies.”
In addition, the companies say regulatory modernisation – comprising fewer, more flexible, and simpler rules – is key to European digital innovation competitiveness.
They say such consolidation and regulation challenges – alongside high costs, inflation, interest-rate hikes, and pressure to maintain low prices – have created a “perfect storm” threatening the telecoms sector’s long-term viability and putting Europe’s digital ambitions “at risk.”
SHOOTS OF CHANGE
However, the signatories say recent German consultation on spectrum licensing was a good example of positive momentum.
“Germany’s telecoms regulator is consulting on proposals to extend spectrum licenses for another five years. In return, operators must commit to reaching certain coverage obligations, such as covering 99 percent of rural households with fast connectivity by 2030,” they say.
“These proposals will bring far more benefits to German citizens than the alternative – an auction taking significant capital from telecoms operators that could have otherwise been spent on infrastructure improvements.”
They say Spain, France and Portugal have also made similar decisions in recent years.
“Ultimately, this is an argument for the future of European competitiveness, and what it means to be European,” they say. “Thankfully, the shoots of change are starting to emerge. Policymakers must now allow them to flourish.”
The joint editorial is the latest in Ericsson’s ongoing focus on driving political and policy makers’ action on European competitiveness, which included CEO and President Börje Ekholm raising the issue with several European prime ministers.
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