Brussels, 09/10/2013 (Agence Europe) - On 8 October, the association of incumbent European telecommunications operators (ETNO) called on the European Council to adopt an ambitious roadmap on digital strategy at the European summit on 24-25 October, so as to attain the objectives set on growth and employment and to improve the competitiveness of the European Union. ETNO believes that the reform proposed by European Commissioner for the Digital Agenda Neelie Kroes on 11 September to achieve a true single digital market (see EUROPE 10919) does not respond to market needs effectively and does not provide for any large-scale deregulation. The package should “encourage investment and innovation in new and enhanced high-capacity infrastructures by establishing a clear deregulatory agenda” given the high degree of competition already in the European Union, said the president of ETNO, Luigi Giambardella. “This is a package. You can't take it apart (…) You can't pick which bits you want from the menu. This isn't a restaurant”, responded Kroes, who was taking part in ETNO's annual conference, held in Brussels on 8 October.
In particular, ETNO criticises the arrangements providing for the capping of cross-border charges and the abolition of roaming charges. In the view of the chief executive officer of Orange, Stephane Richard, these arrangements will deprive operators of the necessary funding for modernising the networks, while it will take years for the arrangements that are in their favour (cutting red tape for operators present in several countries, higher charges for broadband services carrying large amounts of data, and harmonising the sales of lucrative mobile spectrum in the EU) to bear fruit. “Our main problem in Europe is that we have no growth. Europe has to accept the idea that the price for services, for new technology, for mobile broadband, for fibre will need to increase a little bit”, said Richard. “There is very little in the proposals that concretely allows us to drive further consolidation”, said Philipp Humm, Vodafone's head of Europe. This is an opinion shared by the deputy CEO of Deutsche Telekom, Timotheus Höttges. “We cannot compete in our environment any more”, he said. ETNO presented a study it had commissioned from Boston Consulting Group showing the difficulty for operators of achieving the benefits of 4G and of a fall in their revenues of around 2% per year in fixed and mobile telephony over the next decade. “I think telecoms companies will benefit from this package, but I did not create the package for telecoms companies. I'm doing it for European growth and jobs - the 1% of GDP we could gain with a true telecoms single market. I'm doing it for every business in every sector that depends on connectivity for its competitiveness. I'm doing it for every citizen glued to their smartphone and in love with online innovation”, Kroes replied. By contrast, ETNO welcomed Kroes' attitude in favour of consolidating the sector, even if she is not in charge of the European policy on mergers and competition. The commissioners who are responsible for these areas (Joaquin Almunia and Michel Barnier) have shown some reservations on this level, fearing that the disappearance of operators may harm consumers' pockets. It is, however, an option which is to the liking of Höttges, as he believes the future of telecoms will go through a period of external growth, via acquisitions, which will enable sizeable investments to be made in networks. He also supports “complete deregulation in markets that are already competitive” and regrets the lack of an arrangement for this in the Commission's package. Kroes believes that the telecoms package contains a good six measures that will clearly benefit operators, while 80% of investors consider that the package will increase investment. “Which of you thinks it's sustainable for our economy to maintain scarcity, and frustrate the economy's need for connectivity?” (…) Your sector will need to change (…) Technology is moving on, the world is racing ahead, our economy is weak. We need this urgently”, Kroes stated. (IL/transl.fl)