Telecom Giants Warn on European Competitiveness

European telecom giants, Ericsson, Nokia, and Vodafone, 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 European telecom vendors and pn-European operator Vodafone, the companies highlight investment, industry-supporting regulation, and consolidation among areas for action.

The signatories say their calls for action align with the proposed EU Digital Networks Act ambitions, as outlined in the February 2024 EC proposal on future digital infrastructure. While welcoming recent recognition of the need for a new digital infrastructure approach 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 and development opportunities in areas such as 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.

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 modernization is the key to competitiveness in European digital innovation. 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.

However, the signatories say the 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% of rural households with fast connectivity by 2030,” they say. 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. Thankfully, the shoots of change are starting to emerge. Policymakers must now allow them to flourish.”