A new piece of legislation is promised to boost the sector’s fortunes and finally create a true single market for telecoms
Telecoms Act set to be added to the EU’s legislative agenda
On 18 September 2023, the GSMA and POLITICO hosted an event dedicated to the Spanish presidency of the EU, which saw discussions around how policymakers and industry can build a competitive, digital and green Europe – and how they can do so before the end of the current political mandate on 31 October 2024. Dr Marcos Alonso (Ambassador Permanent Representative of Spain to the EU) stated that telecoms operators and networks are indispensable to the region’s economy, security, autonomy and competitiveness. José María Álvarez-Pallete López (Chairman & CEO, Telefónica) echoed this view but considered that the sector’s position is unsustainable due to deflationary pressures amid continued network expansion and the dominance of a few digital platforms. Dr Alonso also highlighted an upcoming informal meeting of telecoms ministers where regulation, investment and innovation will be key talking points – and will provide inspiration for any Telecoms Act that the EC might publish in future. Renate Nikolay (Deputy Director General, DG Connect) later confirmed that new connectivity legislation would be forthcoming – adding that it would be published by the end of the EC’s mandate.
Realising the potential of the telecoms single market
The second half of the event was a panel session focused on the European telecoms single market and efforts to reduce fragmentation in support of the Digital Decade targets. Nikolay acknowledged that the region is some way off achieving a true single market for telecoms and questioned, given the evolving technological landscape and geopolitical factors, whether enough is being done to provide the right incentives for the sector. MEP Andreas Schwab said that the EC would have to be courageous in order to make the single market a reality, stating his belief that policymakers can do more to support existing telecoms business models and help operators return to growth. According to Dominique Leroy (Board Member for Europe, Deutsche Telekom), industry wants to invest more but is facing an imbalance of rising costs and declining revenues.
Operators maintain their push for a ‘fair share’
With a potential EU Telecoms Act on the cards, large European telecoms operators are continuing their push for a “fair and proportionate contribution from the largest traffic generators” to infrastructure costs. In his speech at the event, Álvarez-Pallete López argued that this mechanism would ensure responsible network usage and incentivise sustainable investment, benefitting all in society. 20 CEOs, Telefónica’s included, have now signed an open letter reiterating their call for EU policymakers to enact fair share legislation. It provided more detail on how this would work in practice, including a requirement on platforms accounting for over 5% of traffic to negotiate with operators, with a dispute resolution procedure should that fail. The executives have also called for revisions to spectrum policy and for an acceptance of the sector’s need for scale (through in-market consolidation). The outcome of the ongoing Orange/MasMovil merger review is widely expected to be a strong indicator of the latter, although the EC has stated concerns that the transaction could restrict competition and increase consumer prices.
