European Operators Address Common Problems

The CEOs of the European biggest operators provided a dour assessment of the industry on the continent. Deutsche Telekom boss Tim Hoettges described it as like Groundhog Day.

Chiefs from Deutsche Telekom, Orange, Vodafone Group, and Telefonica addressed the biggest issues. Recently appointed Telefonica president and CEO Marc Murtra kicked off the keynote agenda with a stark warning for Europe. After referencing the region’s leading position in technology 25 years ago, Murtra said we are now in an era where Titanic technological companies are now sharply driving change. These giants work as dominant players in monopoly markets. “All of these companies are based in the USA and China. We must be aware that excessive European regulation, fragmentation, and insufficient industry returns have weighed Europe down into falling behind in technology. This has not happened in the USA, Middle East, or Asia.”

Vodafone CEO Margherita Della Valle highlighted while European players had some of the “best talent” in the globe and were making technological breakthroughs, the question was around how to scale these. “We are innovating, the question is where are our innovations going to be scaled and that’s where we need a different investment environment”. She added it should be a top priority in Europe to find more opportunities to create scale.

Hoettges said Europe should copy what the Americans are doing, highlighting the relative regulatory freedom its unit in the US has compared with its European operations. “This is Groundhog Day and I’m repeating the same story. There is no reason every market has to operate with three or four operators, we should build a European single market. That is our first ask. If we cannot increase consumer prices, if we cannot charge the OTT players, we have to get efficiencies out of the scale we created.”

Discussing 5G, Della Valle noted that in what has now become a global race it’s fair to say Europe is not winning. In terms of standalone, she asserted Europe is not just falling behind the US or China, but is falling behind an increasing number of small- and middle-income countries. The risks of this, she added, were that high-grade digital connectivity was a key foundation of economic growth and risked building digital dependencies.

However, the assessment of the prospects moving forward was not all downbeat with executives highlighting the innovation taking place within European markets and talent available. Orange CEO Christel Heydemann noted despite big AI investments hooked on large language models in the US and China, there is still a significant opportunity for European operators.

“A lot will happen in the edge with AI in the hands of consumers and companies, and what sits between the cloud and the edge, us, who’s going to be this secure platform that will be able to combine the best of both worlds?”She argued AI in the future would require both cloud and edge access, for which the operators would be well-positioned to embrace AI evolutions as secure platforms that will be able to combine the best of both worlds.