The mobile telecommunications market in Europe is undergoing a significant phase of investment in 5G networks. As articulated in the European Commission’s 5G Action Plan and the EU Digital Decade, the key objective is uninterrupted 5G broadband coverage for all urban areas and major roads and railways by 2025, and for all populated areas to be covered with 5G by 2030. Competition dynamics are a key element to these investment targets. Despite its ambitions, Europe has lagged behind its economic peers when it comes to the adoption and deployment of 5G. There is also evidence that the majority of European countries are lagging behind in terms of the quality of existing networks. Such slow progress can have significant implications for consumers and the wider economy, particularly considering the growing demand for networks with higher capacity and higher performance.
An important question is whether market conditions, such as competition dynamics, sufficiently incentivise the investments needed to achieve Europe’s 5G targets and offer advanced 5G services. Compared to international benchmarks and Europe’s three-player markets, four-player markets in Europe have been characterised by lower concentration levels and profit margins over the last decade.
In this report, we assess how competition dynamics in Europe impacted investment and mobile network performance during 2011–2021.
Main findings of the report include:
- Market dynamics in many countries in Europe, especially in four-player markets, did not generate the optimal conditions that maximise investment levels.
- Four-player markets in Europe also experienced lower investment as a proportion of revenues and per connection, and did not improve service quality (download, upload, latencies) to the same degree as three-player markets in Europe.
- Improving dynamic competition conditions such as scale and incentives to obtain a return on investment would likely result in greater investment and better services for consumers.
- European policymakers should therefore carefully consider the full range of policy levers that can generate the market outcomes desired in terms of investment, quality and prices.
Download the report for the full analysis here.