The CEOs of the major European network operators are calling on politicians in Brussels to “support” their “digital ambitions” with appropriate political framework conditions. In a letter signed by, among others, Telekom boss Timotheus Höttges, the CEOs also specify which political levers they would like to have turned and how: lower competitive barriers and frequency costs. And they are renewing their old demand that the US Internet giants share the costs.
Europe should not limit itself to buying technology elsewhere and regulating its use, the thirteen CEOs wrote in Monday from the European network operator association ETNO published letter: “We have to create conditions in which homemade digital infrastructures and services can flourish.” Competition policy must live up to this European claim to leadership.
300 billion needed
The industry representatives point to around 300 billion euros that are still needed for gigabit expansion. The European telcos are already investing around 50 billion a year. The regulation must face the reality that the network operators in their respective markets are in tough competition with “Big Tech” and should not be burdened additionally in view of the massive investments.
The undersigned CEOs, who in addition to Tim Höttges also include his colleagues José María Alvarez Pallete (Telefónica) and Nick Read (Vodafone), explicitly mention the high frequency costs. They demand an end to the expensive frequency auctions, which also “artificially force unsustainable market entries”.
This also applies to the German newcomer 1 & 1, who, after buying 5G frequencies at auction in 2019, is now about to enter the German market. 1 & 1 wants to start building its own network in these weeks. In addition, the provider can fall back on a roaming agreement with Telefónica Deutschland, which it owes to a large extent to the antitrust requirements of the EU Commission for the merger of O2 and E-Plus.
No more expensive frequency auctions
The telcos’ call to renew the licenses for frequency usage in good time instead of auctioning them off is not new. A silver lining is looming on the horizon for German network operators: the Federal Network Agency’s political advisory board discussed the issue on Monday. According to media reports, its president believes a temporary license extension is at least conceivable.
Specifically, the telcos are also against plans to extend EU price regulation to international telephone calls. The CEOs warn that this would deprive the sector of around 2 billion euros in sales over a period of four years.
The network operators also want more legal leeway for cooperation with regard to broadband expansion. Network sharing in the expansion of underserved areas and pan-European projects such as “European Battery Innovation” are promising examples of cooperation models that should be used more intensively.
The CEOs also expressly speak of cooperation within the EU member states. This brings the regulatory hurdles to cooperation at the national level into focus – for example the competition law problems that the joint fiber optic expansion of Deutsche Telekom and EWE Tel had in the north-west.
US giants ask for cash
Last but not least, the CEOs are calling for new efforts at EU level to “rebalance the relationship between global tech giants and the European digital economy”. This is a very old record that every Telco boss has put on at every industry event since YouTube was invented: “Over the top” players who make their profits on the Telco infrastructure should contribute to the costs.
The large platforms cause a steadily growing proportion of traffic in the networks, according to the CEO’s letter. They don’t name any names, but they refer to US giants such as Netflix, Youtube or Facebook. The network operators are investing in the expansion of capacities, they emphasize. But that is only sustainable in the long run if “Big Tech” also contributes directly to the network costs.
Signed the open letter: Thomas Arnoldner (Telekom Austria), Nikolai Andreev (Vivacom), Guillaume Boutin (Proximus), Sigve Brekke (Telenor), Joost Farwerck (KPN), Alexandre Fonseca (Altice Portugal), Timotheus Höttges (Deutsche Telekom) , Philip Jansen (BT Group), Allison Kirkby (Telia), José María Alvarez Pallete (Telefónica), Nick Read (Vodafone Group), Stéphane Richard (Orange), Urs Schaeppi (Swisscom).