Telecoms operators in Europe are at odds with the European Parliament after proposals designed to encourage investment in 5G and fibre networks were watered down.
A European Parliament vote on the matter “undermined” plans proposed by the European Commission (EC) in 2016 which sought deregulation in the sector in exchange for investment, Financial Times (FT) reported.
The EC estimated it would cost €500 billion for the continent to emerge at the forefront of 5G, and put forward the plan to encourage operators and other companies to invest in new telecoms networks with confidence, and to address an estimated €155 billion shortfall in the required investment.
However, the proposals have not received the backing the EC, or indeed operators, had hoped.
Carrots with sticks
In a research note, Barclays Bank said the European Parliament vote had replaced “carrots” with “sticks”, FT reported.
Despite calls for degregulation, the Parliament suggested it could actually increase scrutiny on “oligopolies” in the market, where certain large players have too much power, and proposed handing more power to national regulators, thus undermining the EC’s push for a digital single market in Europe.
At this stage, nothing is set in stone and the proposals will be negotiated with member states into early next year. However FT noted the EC’s plan could yet be further weakened by member states’ opposition to the introduction of spectrum harmonisation across the continent.
Lisa Fuhr, director general of European operator lobby group ETNO, said the European Parliament vote “misses the point” and risks slowing down broadband deployment.
A Vodafone Group company representative added the revised proposals increase the “regulatory burden” on companies.
Following investments in fibre in Spain and Portugal, Vodafone is proposing to co-invest in networks across the UK with Openreach.
“Those amendments, if adopted, would erode investor confidence in European telecommunications,” the Vodafone representative said.
The European Parliament also proposed caps on the cost of calls between the EU and other countries, which it described as “abusive”. The push comes after European operators were forced to abolish data roaming fees across the bloc.
Telcos urge change
At an event hosted by ETNO and FT in late September, Deutsche Telekom CEO Tim Hottges and Orange CEO Stephane Richard urged Europe to cut regulation and help the continent in meeting 5G and digitalisation goals set by the EC.
Telia CEO Johan Dennelind, in an open letter to European policy makers, also stressed the need for a more ambitious European policy framework.
“The European institutions have a pivotal job to do in the coming 6-12 months, the results of which will be studied closely for years to come,” he wrote yesterday (3 October). “We have the opportunity to be the community of leaders which moved Europe onto a higher plane of achievement.”