In February 2023, the European Commission launched a consultation on “the future of the electronic communications sector and its infrastructure.” The consultation sought stakeholders’ views on ensuring that the investments required to roll out such infrastructure are mobilised promptly across the EU. A pivotal part of the consultation was the ‘fair contribution’ debate – the concept that all players benefitting from the digital infrastructure should contribute to the investments in connectivity infrastructure.
Following the end of the consultation period, the GSMA and EURACTIV convened EU policymakers and the broad connectivity ecosystem at the GSMA Brussels office for an in-depth discussion on the possible solutions for the fair contribution debate. The standing-room-only session indicated a policy topic at the height of interest in the EU bubble as stakeholders wait for the European Commission to report initial findings from the consultation.
Daniel Pataki, GSMA’s Vice President of Policy and Regulation & Head of Europe, welcomed attendees and dedicated evening’s discussion to Europe’s competitiveness in the global marketplace.
In the panel discussion, moderated by EURACTIV’s Dave Keating, Carlota Reyners Fontana, Head of Unit Electronic Communications Policy, Implementation and Enforcement at DG Connect, stated that the consultation has a much broader scope than the fair contribution debate. It is about whether Europe has the proper infrastructure to support its competitiveness. Connectivity is the underlying infrastructure for all digital innovation, but many investments are needed, including in cybersecurity, environment and artificial intelligence. On the investment challenges of the telecom sector, she stated that there is still no single market for telecoms. There are cross-border services, but they are provided locally, pointing to the lack of scale among mobile operators. Another challenge is reaching the EU Digital Decade target to connect all populated areas with 5G by 2030. The 5G rollout across the Union is behind the target. There is a big difference in rollout between rural and urban areas, and the difference between ‘real’ 5G and mixed 5G adds more complexity for tracking progress. Hence, the EU Commission is working on many areas to help deployment and reduce costs, including regulatory, public-private partnerships and demand-side measures.
Ben Wreschner, Chief Economist and Head of Public Affairs at Vodafone Group & GSMA’s Policy Group Europe Chairman, stressed that best-in-class digital infrastructure is critical to the EU’s economic growth and competitiveness. Currently, there is an investment gap of around EUR 200bn. With 4G, Europe lost the consumer internet; with 5G, Europe is on track to lose the industrial internet. He advocated for a ‘win-win-win’ co-investment approach as the suitable mechanism to close the investment gap and reach the Digital Decade targets: “A win for telcos, a win for tech, but ultimately a win for the consumer.” Fair contribution offers the right incentives to optimise traffic and contribute to the cost of carrying it.
Tomas Jakimavicius, Director of European Government Affairs at Microsoft, argued that the internet value chain is a complex ecosystem of building blocks, not just connectivity. He agreed that everyone in the value chain must contribute to the infrastructure cost but “in their own way.” He proposed more market-based investments and partnerships with telcos as a potential solution.
Michel Van Bellinghen, Member of the Management Board at BEREC and Chairman of the BIPT Council, was more sceptical about fair contribution, stating three reasons: the difficulty in confirming that there is an investment gap, proving who is responsible for the traffic costs and verifying that the costs are growing in line with traffic.
Finally, Antonio Manganelli, Professor of Antitrust and Regulation at LUMSA University, balanced the conversation. He argued that the consultation would clarify the remit of the internet ecosystem, who is contributing, and the different weights of different contributions. He noted that while regulation is not necessarily the right approach to fix the fragmented telecoms market, a contribution could decrease the price of internet access for the consumer’s benefit.
While there were different viewpoints, there was a consensus that if the status quo is maintained, Europe will fall behind its global peers to its people’s economic and commercial disadvantage. Now is the time for action, not continued inaction. If Europe is to regain digital leadership, we must fix the fragmented telecoms market. An evolving telecom sector is the engine for the digital and green transitions we are all committed to achieving. Much of Europe’s economic and societal future depends on solid and new-generation networks, and we all need to be part of building it and investing in it.
The debate was followed by the annual GSMA Summer Reception, where we welcomed our members and a broader community for an evening dedicated to Europe’s digital future.