European Union telecoms commissioner Neelie Kroes has defended her controversial proposal to create a more unified market to a gathering of key executives, arguing that urgent changes are needed to treat the “sickness” of the sector.
Speaking at the…
European Union telecoms commissioner Neelie Kroes has defended her controversial proposal to create a more unified market to a gathering of key executives, arguing that urgent changes are needed to treat the “sickness” of the sector.
Speaking at the FT-ETNO Summit in Brussels, Kroes said individual operators cannot pick and choose which parts of the proposal, released in September, they want, quipping “this isn’t a restaurant”.
Saying it is “perhaps inevitable” that each stakeholder is not happy with the entire proposal, Kroes argued that it must remain as it is, adding that the various elements support each other.
“Bringing down barriers is ultimately good for the sector, but you can’t do that without removing surcharges, without removing the arbitrary high charges for calling across borders, without consistent net neutrality rules in each country – not credibly,” she said.
She sought to defend herself against criticism from some operators about plans to end roaming charges within the EU by contending that the investment community, not roaming charges, will provide the capital needed for next-generation development.
“And that community also confirms that my proposals create a predictable environment – for the first time in years,” she said.
Kroes contended that investors have welcomed the proposal, noting that one major investment bank has said 82% of Europe’s major investors expect it will lead to greater investment in network development.
The commissioner also noted that a public-private partnership on 5G mobile technology is being prepared, to which she hopes the commission will contribute hundreds of millions of euro.
Kroes said that while she believes the telecoms sector will ultimately benefit from the proposal, her main goal is to boost European economic growth and employment, claiming that a single telecoms market could add 1% to the GDP.
“I have put on the table a proposal that would treat the sickness of the sector – a predictable investment environment and incentives to shift to sustainable business models – just as they are already doing in the Scandinavia and the Baltics,” she said.
The commissioner reiterated that the proposal is designed to enable companies to operate and expand across borders more easily.
She said operators cannot rely on the “cash cows of the past”, highlighting roaming within the EU as a prime example, saying they must develop innovative new ways of growing revenues.
“Your sector will need to change: but emphatically it doesn’t need to decline,” she said.
Kroes described her vision of a true single European telecoms market as one where large and small operators compete alongside one another, the former having the scale to compete globally and the latter the flexibility to innovate. A market with healthy competition, including from OTT operators, requires less sector-specific regulation, she said.
Kroes argued that the European telecoms sector needs to be restored to a healthier state before longer-term regulatory issues, such as those dealing with convergence and OTT services, can be addressed. Short term, regulations in competitive markets need to be relaxed, she contended, so operators can boost connectivity and services.
“Only a healthy sector can provide high-quality connectivity. And without that, the discussions about new regulatory models make little sense: Europe would simply be a follower in the global economy.”
Speaking after Kroes, Luigi Gambardella, executive chairman of lobby group ETNO, said that the European telecoms market will continue to suffer declining revenues unless there are urgent updates to the current regime which boost investment. He said that while his organisation supports the proposal to create a more unified market, it should act as a “springboard” for further reforms.
“Is what is on the table enough to put Europe back on track?” he asked.
