Politics is starting to turn in favour of telco – ETNO

Despite the promises made by politicians, few in the telco, technology or media industry would believe politics is designed to help, but ETNO think the tides are turning.

At the 5G Core conference in Madrid this week, much of the attention has been directed towards the technological side of the business. Few would complain about this bias, it is a technology conference after all, however there has been a reminder of the challenging element of politics.

“We can all agree that 5G is a strategic challenge for Europe,” said Lise Fuhr, Director General of ETNO. “But there is another part and that is what is role of politics, policy and society? What are the obstacles and enablers of 5G? How do we partner with the different stakeholders to make 5G happen in a fast way?”

As mentioned above, almost every politician who is worth his or her salt has been breaching the benefits of a more favourable regulatory and policy environment to facilitate investment in the TMT segments, but there seem to be few real-world benefits. This however might well change in the near future.

A good sign of this optimistic future are the new appointments at the European Commission.

On November 1, Ursula von der Leyen will assume office as the new President of the European Commission. Although von der Leyen is a career politician, she first assumed political office in 2001, she has at least made the advancement of the digital economy in Europe a priority.

In her ‘manifesto’, future-proofing the European economy for the digital age was listed as the third priority. 5G is a key component of this message from von der Leyen, as is artificial intelligence and high-performance computing. von der Leyen might not have experience in the technology industry, but at least she realises the importance and is prioritising advancement in the field.

The second appointment is Sylvie Goulard as Commissioner for the Internal Market. In this role, Goulard has been tasked with overseeing the progression towards a digital economy, with one component to ‘enhancing Europe’s technological sovereignty’ and another to define ‘standards for 5G networks and new-generation technologies’.

From Fuhr’s perspective, this is a sign of positive intent. From the outset of her tenure, von der Leyen has set digital as a top priority. It is an add-on as it might have been considered for other politicians, it isn’t necessarily a plug for headlines, it is a proactive progression towards the digital economy.

Looking at the policy side, the European Electronic Communications code is ‘a compromise’ according to Fuhr. The policy could have been more ambitious to help the industry, but at least it isn’t doing any harm. New spectrum will be released, ownership of licences has been extended for telcos and there is positive work in the small cells area as well.

While these are not definite signs politics and policies are going to be enablers of digital progress, there is plenty of opportunity for something to go wrong, all the right noises are being made by the European Commission. There is still plenty of risk, but it looks promising.

Pressure mounts on European spectrum allocation

Now that 5G is within reach the urgency to make enough spectrum available is increasing significantly, especially in Europe.

Everyone seems to be doing a pretty decent job of R&D, collaboration, testing, etc, but you can have all the base stations, virtualized cores and whizzy devices you want and they won’t be much use without the spectrum to carry the signals. For 5G to work we need a lot more spectrum than we currently do and that requires a lot of effort across the board to pull off.

Here in the UK Ofcom has baked in the announcement it made last week concerning the six companies that will be participating in the imminent auction of 40 MHz of 2.3 GHz spectrum and 150 MHz of 3.4 GHz spectrum. The latter will be the first tranche of spectrum specifically set aside for 5G.

The usual suspects are all there: EE, Vodafone, Telefónica and Hutchison. The two left-field ones are Connexin, which has an interest in fixed wireless access, and Airspan Spectrum Holdings, which is a subsidiary of small cell specialist Airspan. EE won’t be allowed to big for the 2.3 GHz and will only be able to win a maximum of 85 GHz of the 3.4 GHz, but it’s unlikely to get close to that anyway.

Meanwhile ETNO, one of those organisations that represents European operators, is continuing to rattle the cage of the many pan-European bureaucracies to urge them to free up more spectrum more quickly.

“5G is too important for Europe to accept a compromise falling short of the original ambition,” said Lise Fuhr, ETNO Director General. “Future licences needs to deliver increased certainty with respect to the status quo and a truly effective peer review system is essential to ensure the credibility of spectrum policy.”

The specific gripe seems to be the Electronic Communications Code negotiations, which ETNO has been moaning about for a while, and are apparently still lacking urgency. ‘We ask legislators to ensure that the final text delivers far more ambition, more certainty, less complexity and a credible governance system,’ pleads the ETNO announcement.

European telcos sulk about EU direction on regulation and investment

Following an opaque and arcane ruling from a European Parliament committee there is concern that the continent is losing its way on telecoms.

The Committee on Industry, Research and Energy voted on a broad range of issues surrounding the involvement of the Eurocracy in the telecoms business. Among the conclusions of the vote were a move to reduce the cost of long distance calls within Europe, which seems to be an ideological move equivalent to the abolition of data roaming charges.

While this seems like another telco revenue stream under attack, most of the moaning was reserved for the realisation of fears expressed prior to the meeting; that the EU tending towards increased regulation and decreased investment in telecoms. This is exactly the opposite of what operators want.

The core issue is the direction of the European Electronic Communications Code – a collection of rules, regulations and initiatives originally designed to give European telcos a shot in the arm. Organisations such as ETNO (European Telecommunications Network Operators’ Association) have consistently complained about its apparent retreat from its lofty initial ambitions.

“For the Gigabit Society vision to be credible, the Code needs to stick to its original objectives,” said Lise Fuhr, ETNO Director General. “Without investment incentives and spectrum reform, European citizens and businesses risk being stripped of superfast networks and innovative services.”

Here are ETNO’s specific concerns:

  • Investment-conducive measures need to be restored and strengthened. All investment models for very high capacity networks should be provided with clear regulatory incentives. In particular, we regret the weakening of the Commission proposals to grant incentives to co-investment and that such incentives were not extended to other collaboration models.
  • The duration of spectrum licenses needs to remain 25 years or longer. An interim review of the license conditions would result into a major setback for investment in mobile connectivity and in 5G specifically. Long-term legal certainty is required in view of the long pay-back periods for 5G networks.
  • All unjustified regulatory proposals should be rejected. Economic regulation beyond the concept of single or joint dominance would not be legally consistent with the architecture of Europe’s telecoms laws. Similarly, additional retail price regulation is unjustified, with markets for intra-EU calls being competitive and customers being able to choose among multiple free alternatives.
  • Service regulation should boost consumer choice. Regulatory simplification should allow telecom operators to innovate as much as internet players, in order to provide increased choice for European consumers. At the same time, harmful regulation of bundles should be avoided. This would take away successful offers that are currently taken up by 7 in 10 European consumers (Ipsos, 2017).

ECTA (European Competitive Telecommunications Association) has also expressed concern, while the GSMA seems to have been too busy promoting its money-spinning events to comment. The real danger for European telcos is that their interests are sacrificed at the altar of super-state dogma. The EU seems to be obsessed with creating a United States of Europe and apparently considers the profits of its incumbent telcos to be a small price to pay.