Shaping Europe’s Digital Future: Competitive, Digital and Green Europe Relies on Connectivity

On 18 September, the GSMA hosted a thought provoking event dedicated to the Spanish Presidency of the European Union and the future of Europe’s connectivity sector. This gathering brought together EU policymakers, industry leaders, and visionaries to share insights and perspectives on the critical role telecoms is playing in shaping Europe’s digital and green future. 

Re-watch the event at your convenience

The triple transition and the role of telecoms 

The Spanish Presidency is pivotal for Europe’s digital economy. Spain’s commitment to advancing the Triple Transition—encompassing social, digital, and green ambitions within the 2030 Agenda—sets the stage for meaningful progress. Telecom infrastructure is instrumental in facilitating this transition. High-speed digital infrastructure, 5G, and advanced communication technologies are crucial for delivering the services needed for a sustainable future. Efficiency, effectiveness, and sustainability are essential in rolling out these technologies. 

In his opening keynote, Dr. Marcos Alonso Alonso, Ambassador Permanent Representative of Spain to the European Union, emphasised the pivotal role the digital and green transitions are playing in Europe’s economy, security, autonomy, resilience, competitiveness and sustainability. Telecom companies, he said, are indispensable in achieving these goals. Dr. Alonso highlighted that the informal meeting of telecom ministers in Lyon in October will inspire the next European Telecoms Act. Europe’s future success, he added, depended on balancing resilience and competitiveness, with innovation and investment at the heart of policies. 

Fair contribution to innovation 

José María Álvarez-Pallete, Chairman & CEO of Telefónica and Chairman of the GSMA Board, gave the second keynote and positioned Europe as being on the brink of the Fourth Industrial Revolution – the digital revolution, offering unprecedented wealth, possibility and well-being at a pace unprecedented in human developmental history. However, he said, Europe has lost ground in innovation over the past two decades, with a 30% decline in global market share. The telco sector is central to Europe’s technological development, he added, but pointed out that the industry’s situation in the region is unsustainable due to deflationary pressures amid constant network expansion and the dominance of a few digital platforms. Telcos, he said, are on the cusp of another profound transformation, driven by the transition to cloud, Edge computing and open APIs, with future networks effectively becoming decentralised supercomputers. This transformation is essential to support the digital revolution. 

Mr. Álvarez-Pallete raised a critical point during the event: the concept of Fair Contribution. This, his said, is not about imposing levies or taxes or slowing down investment; instead, it’s a tailored, free commercial agreement between large traffic generators and network providers. This approach ensures responsible network usage, incentivises sustainable investment, prioritises network expansion over mere capacity, and benefits society, telcos, and digital platforms. It’s a strategy for fostering innovation while creating a collaborative environment. 

Europe’s Telecoms Single Market Potential 

Mr. Álvarez-Pallete pointed out that by 2030, digital technologies will permeate every facet of Europe’s economy and society. The integration of 5G mobile and fibre networks with emerging technologies like artificial intelligence (AI), virtual reality (VR), and the Internet of Things (IoT) is already reshaping the telecoms landscape. Telcos, he noted, are evolving into more sophisticated ‘tech comms’ companies, becoming active collaborators in shaping the new digital era. However, Europe’s telecom sector faces significant hurdles. 

The sector has been grappling with challenges from excessive regulatory costs, insufficient scale and market imbalances. Inaction, Mr. Álvarez-Pallete said, could have dire consequences: Europe’s digital infrastructure will lag behind other global markets, unable to meet the evolving demands of the digital economy. This reality underscores the urgent need for strategic interventions. 

Read key takeaways from this event in the blog post by José María Álvarez-Pallete, Chairman & CEO of Telefónica and Chairman of the GSMA Board.

Opening a Politico Live Spotlight session in the second half of the event, John Giusti, the GSMA’s Chief Regulatory Officer, proposed a three-pronged approach to address these challenges: 

  • Simplifying and harmonising regulation – especially in the area of spectrum access 
  • Urgently building scale by reducing barriers to in-market consolidation, as well as fostering cooperation on innovation such as Open Gateway, to ensure that European telcos can be globally competitive 
  • A Fair Contribution mechanism to ensure that the handful of the significant ‘Big Tech’ companies – those who benefit the most from access to European consumers – contribute to the network costs associated with their ever-growing traffic. 

Addressing these policy challenges is pivotal in accelerating the creation of a Telecoms Single Market and achieving the EU Digital Decade targets. This approach empowers sustainable economies and fosters opportunities in the digital realm for European citizens, SMEs, and society.

A new impetus for change 

During a discussion panel, key figures in EU policymaking and industry leadership developed these themes further. Renate Nikolay, Deputy Director General of DG Connect at the European Commission, addressed the evolving technological landscape and geopolitical factors, raising the critical question of whether Europe is doing enough to support the connectivity sector. She emphasised that competitiveness and economic security cannot be achieved without solid connectivity. 

MEP Andreas Schwab echoed Ms. Nicolay’s remarks that Europe is far away from a digital single market, let alone a telecoms single market. He highlighted the need to support existing telecom business models. He also called for measures to limit data use caused by excessive traffic. 

Dominique Leroy, Member of the Board of Management, Deutsche Telekom AG, highlighted the scale imbalance European mobile operators face. She said that costs are rising while revenues are declining, and stressed the importance of better regulations and streamlined access to spectrum and infrastructure. Improved permit procedure, and other EU-level incentives were also necessary to address these challenges. 

Ursula Pachl, Deputy Director General of the European Consumer Organisation, BEUC, emphasised how important more and better connectivity would be for the consumer. She acknowledged that the competitive telecom market in Europe has offered consumers more choices and better prices than other models, such as that applied in the United States. 

The event showcased a clear vision for Europe’s digital and green future. The telecoms sector plays a pivotal role in these transitions, making the need for regulatory changes and a fair contribution mechanism urgent. This was underlined by Renate Nikolay in her closing remarks: “The time of ‘business as usual’ is over. The telecom industry has come on the political radar, and rightly so.” 

Europe’s journey towards digital leadership, driving innovation and applying sustainability relies on a robust telecommunications sector. Collaboration among all stakeholders will pave the way for a brighter future. Europe stands at the precipice of a transformative era, and today’s decisions will shape its destiny in the digital age, a future in which the GSMA plays a vital role in shaping. 

Read key takeaways from this discussion in the blog post by Dominique Leroy, Member of the Board of Management, Deutsche Telekom AG.