Breton pushing single market but telcos want in-country consolidation first
Thierry Breton is once again banging the cross-border consolidation drum, extolling the virtues of a single European market for telecoms, but operators are still asking for in-market tie-ups.
October 12, 2023
Thierry Breton (pictured) is once again banging the cross-border consolidation drum, extolling the virtues of a single European market for telecoms, but operators are still asking for in-market tie-ups.
The European Commission’s Internal Market commissioner shared a lengthy LinkedIn post this week to accompany the publication of the results of the EU’s consultation into the future of connectivity and infrastructure in Europe. The big tech versus telco element of that consultation has captured most of the related headlines over the past year or so, including earlier this week, when it emerged that Breton is unlikely to set out his strategy on the matter in the near future, thereby pushing any legislative action into the lap of the next Commission.
But aside from a cursory mention of the idea of compelling the Internet giants to contribute financially to the development of fibre and 5G networks in Europe, Breton largely ignored it and chose to focus instead on another of his favourite causes: the creation of a single telecoms market.
“Telecoms operators need scale and agility to adapt to this technology revolution, but market fragmentation holds them back,” Breton wrote, having liberally peppered his previous two paragraphs with buzzwords such as AI, cloud and quantum computing, and the metaverse.
“Too many regulatory barriers to a true telecoms Single Market still exist, on spectrum acquisition, consolidation, legacy networks, security, and so on. This is the clear finding from the consultation, the results of which we published today,” he said. “Low returns on investment, long payback periods and market uncertainties, in turn, reduce the attractiveness of the telecoms sector for investors who want to put their money in building the networks of the future, rather than squeezing legacy copper networks. In the long run this can weaken the sector and expose it to hostile take-overs, despite the critical nature of its assets.”
Whether that last point refers to the ongoing saga of Saudi Telecom’s proposed acquisition of a 9.9% stake in Spain’s Telefonica only Breton himself knows. Either way, he chose his words very carefully there and throughout the post.
Insisting that the single market would foster growth and innovation, Breton turned his attention to the infrastructure layer needed to make it happen.
The EU must “facilitate cross-border operations and the creation of true pan-European infrastructure operators, with the scale to reap the full potential of an EU-wide telecoms market,” Breton said. “Pan-European operation of core networks and network slices is the technical solution that technology offers today to make it happen.” He conceded that there are a number of issues to be addressed around security, data retention and so forth. “There is no secure connectivity without healthy telecoms operators with sufficient investment capacity,” he said.
The operators doubtless agree there. But the trouble with the single market idea – aside from manifold practical issues – is that the operators themselves aren’t really that invested in it, as a closer look at the actual results of the consultation demonstrates.