Operator CEOs call for “same service, same rules” principle

Operator CEOs call for “same service, same rules” principle

02 MAR 2015

Regulators should stop treating network operators and internet players differently, argued leading mobile industry figures at this morning’s opening keynote of Mobile World Congress (MWC).

Chief executives from Deutsche Telekom, Telefonica, Telenor and Vodafone claimed un-level playing fields threaten network investment and economic growth, and go against consumer interests.

Timotheus Hoettges, Deutsche Telekom Group CEO, said Facebook was a communication service, yet not regulated as one. He then argued there was a “clash of business models” between network operators and internet firms, and that network players were left holding the short straw.

“We are an asset-heavy industry, where everything is interoperable and open,” said the Deutsche Telekom chief, pointing out that interoperability even extended to “closed networks”, such as Google and Facebook. He ruefully added that internet giants were asset light and could offer services for free. “How can you compete with a voice, SMS or video service which costs nothing?” asked Hoettges.

Cesar Alierta, CEO of Telefonica Group, said operators were “competitively disadvantaged with over-the-top players”, owing to heavy infrastructure investment. He reckoned regulators should apply the principle of “same service, same rules” to players of every hue, and that consumers should have a “portable digital life” where it’s just as easy to switch digital ecosystems as it is networks.

Putting himself in the shoes of customers, Vittorio Colao, CEO of Vodafone Group, was prepared to admit that the likes of Facebook, Google and Amazon were “brilliant services”. In the same breath, however, Colao highlighted how consumers’ digital lives were dominated by just a few internet players. Echoing comments made by Alierta, the Vodafone chief said customers were beginning to question the lack of portability between different digital platforms.

“Why do I pay twice for the same app?” he asked, referring to the dominance of Apple’s iOS and Google’s Android in the mobile OS space.  “I can choose operators, I can change operators, and I want to choose in the converged new world.”

Anne Bouverot, director general of the GSMA, emphasised how mobile and the Internet of Things has a far-reaching role to play across all industry sectors, with the potential to drive a new phase of European industrial growth. “Mobile changes everything,” she said.

To safeguard network investment, Hoettges called for a single regulatory environment – to cover all players in the digital eco-system – the scaling back of wholesale price regulation, and coordinated spectrum policies.

The Deutsche Telekom chief also wants a more nuanced discussion on net neutrality. While supporting the principle that all web traffic should be treated equally, Hoettges said this was not always possible. The connected car, for example, would always have a stronger claim on network resources than someone listening to Spotify. Rather than full-blown net neutrality, Hoettges advocated that regulators leave room for “quality classes” in order to cater for different types of internet traffic.

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