Telcos might finally be getting somewhere with all their recent lobbying, if new rumours are to be believed.

Nick Wood

February 15, 2024

4 Min Read
EU

According to Reuters, the European Commission is on the verge of launching a consultation seeking industry feedback on whether it should relax rules governing in-market consolidation.

It allegedly acknowledges the 50 mobile operators and more than 100 fixed-line providers across the bloc, and suggests that market fragmentation along national borders could impact the ability of operators to reach the scale needed to invest in the networks of the future.

"The question arises as to whether cross-border consolidation or different forms of cooperation upstream could allow operators to acquire sufficient scale, without compromising downstream competition," says the paper, which Reuters claims to have seen.

The consultation doesn't stop there.

The report also alleges that Brussels also wants to know if it should compel content application providers (CAPs) to financially contribute to network deployment costs – the so-called fair share debate.

The EU "may consider the broadening of the scope and objectives of the current regulatory framework to ensure a level playing field and equivalent rights and obligations for all actors and end-users of digital networks."

Reuters said the consultation is due to be presented by Commission vice president Margrethe Vestager on 21 February.

Telecoms.com has contacted the European Commission for confirmation, and will update this story if hears back.

If the report is accurate – and there's not a lot to suggest it isn't – then this consultation could be music to the industry's ears.

With Mobile World Congress (MWC) just around the corner, the telecoms industry has stepped up the pressure on European regulators to give it an easier ride.

Earlier this week, ETNO, the GSMA and a broad coalition of associations from other industries – from automotive suppliers to food and drinks companies – issued a joint statement calling on the EU to strengthen the Single Market by greasing the wheels of cross-border business activity.

The group accuses Brussels of neglecting the full harmonisation of regulations across the EU, which is throwing up obstacles to trade.

"The increasingly complex and fragmented regulatory environment has made it less attractive for all companies to invest and scale up rapidly in the EU," the statement said. "Unsurprisingly, this has led to less foreign direct investment, slower growth and less fiscal space for governments, exacerbating the cost-of-living crisis now felt by many European citizens.

"A well-functioning Single Market is indispensable to incentivise more investment and innovation in Europe, finance social security, fund quality education, and take additional measures for the climate."

The business community that this group represents wants the European Commission to undertake a comprehensive programme of essentially doing away with what it sees as a lot of fragmented and onerous regulations, and reach out more frequently to businesses to get their input on how to deepen European integration and strengthen the single market.

"Telecom operators support a stronger EU Single Market. Leadership in the connectivity ecosystem requires scale, higher investment and lower regulatory barriers," said ETNO director general Lise Fuhr.

"Eliminating barriers in the Single Market is crucial to enable the mobile industry to make the massive investments needed in digital infrastructure, keep up with global competitors, and ensure the EU achieves its connectivity targets and strategic ambitions," added Laszlo Toth, the GSMA's head of Europe.

Late last month, ETNO also released a report warning that as far as telecoms goes, Europe is facing a 'lead or lose' moment, and that as things stand, the market's fundamentals are not sufficiently attractive to warrant investments of the scale needed to build the networks that consumers and businesses demand.

Vodafone issued a similar warning in a report of its own, claiming that a 'connectivity chasm' is opening up between Europe and other regions.

While ETNO has called on regulators to address overly-competitive markets, and force CAPs to bear some of the cost of network deployment, Vodafone has opted to keep its powder dry for now, saving its recommendations for a later report.

The EU will have to tread carefully.

If it caves into the demands of big business, there is a risk that the easing of competitive pressure will result in higher prices, and money that was supposed to be spent on networks will instead be distributed as dividends.

As for fair contribution by CAPs, they will likely argue that their higher costs will have to be recouped from end users.

These issues regarding consumer choice and affordability are the reasons why all this telco-led doom-mongering and clamour for reform is usually little more than hot air – part and parcel of the news cycle in the run-up to MWC.

But if the Commission really is planning a consultation on the very issues telcos have been banging on about, then this year might just be different.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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