Regulatory barriers continue to hinder European investment – at the FT ETNO Summit

The mood from The Financial Time-ETNO Summit today in Brussels was one of tentative, if not forced, optimism amongst the background feeling of missed opportunities from the recently agreed European Telecoms Code and the repeated sentiment that Europe is risking its potential for investment from the tech sector with its fragmented regulatory approach and low rates of return on investment.

Mariya Gabriel, Commissioner for Digital Economy and Society at the European Commission, wants to see the creation of a level playing field with fairer conditions to compete, recognising that the rise of online platforms and ensuing use of data had become a huge challenge for public policy. She also called for massive investment in human capital, and research and development. Above all, at the very heart of the Digital Single Market remains connectivity. The high-speed network of Europe needs to be one that is not just fast but also secure and intelligent, with cyber security the sine qua non of building trust online and allowing businesses to operate.

A more despondent note came in the form of the realities of the case for European telcos investing in Europe. Reticence from the operators to rushing into 5G – seen as technology that the networks aren’t ready for – came with a hope from Telefonica that the right strategy for Europe would see joined up thinking around 5G and fibre. The recent spectrum auction in Italy, and the huge amounts doled out for 5G spectrum has resulted in subdued enthusiasm from operators with many still waiting to justify their investment in 4G. Proximus CEO Dominique Leroy pointed out that the industry is now one of data, not voice and continual investment is required – with only 60% of customers in Belgium having a 4G smart phone, they haven’t yet seen a decent ROI on 4G let alone thought to the next generation.

Orange CEO Stephane Ricard called for ambition that would see Europe reach its digital potential through more harmonisation, more scale and a more level playing field. Timotheus Hottges, Deutsche Telekom CEO warned that while the focus of regulators is on consumer prices and not investment conditions, investment will inevitably be hindered. Yet he remains optimistic and hopeful about the potential of digitisation, and wants to invest in Europe despite highlighting that the cash flow for DT comes from outside of Europe where it is much easier to invest and the returns are greater.

Touching on net neutrality, 2018 BEREC Chair Johannes Gungl, said of the recent BEREC consultation looking for concrete examples of exact use cases that wouldn’t be possible under the current guidelines, not one was put forward that wouldn’t be allowed.

Following political agreement on the European Electronic Communications Code, it will now fall to BEREC to produce guidelines on implementing the Code – for example on end users’ rights and provisions on co-investment and symmetric regulation.

The day concluded with a question on Brexit looking over the highs and lows of the discussions over the UK’s exit of the EU and the future role of Ofcom within BEREC. With the current BEREC Chair stating firmly that he could recall no highs of the process and that the likelihood being that Ofcom would no longer be at the table.