European Commission vows to fix 'fragmented telco market'

EU Commissioner in charge of the internal market Thierry Breton calls for a more homogeneous telco internal market, in the midst of a consultation on the future of the European telco sector.

Ahead of a release of findings from an EU consultation – which in part is looking at the issue of fair contribution and otherwise how the telco sector might be better funded going forward – EU Commissioner in charge of the internal market Thierry Breton has pointed to a ‘fragmented telco market’ in Europe as part of the problem.

The comments were made at a conference organised by Orange the full video of which is here.

“Market capitalisation of the EU telcos consistently falls behind that of the US… which benefit from greater growth opportunities,” said Breton “We know this, we know why – it is better to be a telco operator in the US than in Europe, where we have 153, 160 telco operators in Europe, something like that? In the US, 3? 4? That’s not the only answer, that’s part of the answer. And we all know that, we cannot hide this fact. We have a fragmented telco market, and I’m the commissioner for the internal market and I don’t like it. We need to have a more homogeneous telco internal market.”

Further framing the problem of deployment and funding in the EU telco space, he added: ‘In terms of 5G deployment the EU lags behind other regions of the world – population coverage [is] 95% in the US versus 72% in the EU 27… 5G investment in the EU per capita is lower than other regions of the world.”

“We need to make sure that public funds will continue to play an important role in private investment… our US partners are allocated $90 billion in broadband through the Infrastructure and Investment Act and Job Act and also the American Rescue Plan. To compare in Europe, European investment in connectivity with the Recovery and Resilience facility accounted to 16.5 billion.”

Breton went on re reemphasise what many European telcos have been complaining about for a long time – the financial viability of telcos ramping up infrastructure upgrades, which the EU sees as a vital political goal.

“Consequently to unleash the full technological potential of our internet communications, we must definitely address the challenges associated with the financial viability of the telecoms sector. We know that limited financial resources and inadequate returns may force operators to prioritise managing existing services over transformation initiatives. Moreover we must also ensure that our policy framework enables and incentivises private investment.”

A big debate in the telecoms sector at the present moment is whether or not big tech firms like Netflix and Facebook should help fund building telecoms infrastructure since so much internet traffic is used by those services, and this in part is what the consultation is there to look at.

Earlier this week we reported that the majority of European lawmakers appear to be unconvinced by the idea. However, analyst firm Strand Consult reckons it’s be a bit more even than that. They told us that, as it stands, 10 member states are against ‘mandatory fees’, 10 are for some kind of cost recovery, and 3 are neutral.

During the talk Breton mentioned that level of feedback the consultation had received during the talk: “We received over 437 contributions… from member states, companies, hyperscale, start-ups, NGOs, academics, think tanks, a lot of consultation demonstrating that there is a lot of interest to this absolutely crucial subject. “

The consultation period is now closed, so we will have to see what conclusions it has drawn from that process and what measures the EU thinks are best employed to benefit its telco sector, whether that’s other sectors being funnelling money in, stimulating investment somehow, or allowing a regulatory framework that would allow for operator consolidation. Or something else entirely.

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