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FTTH Europe Conference

ETNO Executive Board Chairman, Luigi Gambardella, spoke at the closing ceremony of the FTTH Council Conference.

 Intervention by Luigi Gambardella at the closing session: Europe in 2020, with the participation of Commissioner Kroes

Dear Commissioner Kroes,
Dear Ladies and Gentlemen,

First of all, let me thank the FTTH Council for having invited ETNO to participate in the closing plenary of this conference. As highlighted by both the EU 2020 and the Digital Agenda for Europe the benefits of high speed broadband networks for Europe’s economy and society are now fully recognised and represent key challenges for the ICT Industry. I would also like to praise the FTTH Council for its important contribution to this debate. ETNO members, as main investors in Europe’s high speed broadband networks, share the conviction that NGA can put Europe back to the driving seat of competitiveness.

The Digital Agenda provides an ambitious vision: the full potential of high speed Internet must be embraced by all sectors and the society as whole to enable a smart and sustainable growth. If the targets are met, by 2020, Europe will have evolved from the Information Society to the Digital Age. 

High speed Internet will be the backbone for communications between people, objects and machines. The key condition for this vision to materialise is of course to ensure that the necessary infrastructure is deployed and that new services are widely adopted both by private and public sectors.  All European citizens and public administrations will then benefit from it.

The targets in terms of high speed broadband deployment are ambitious:  all households should have access to at least 30 Mbps and half of them subscribe to 100 Mbps. 

The size of the investment required in NGA in Europe is estimated by the EU Commission at up to 58 billion euros to achieve the 30Mbps coverage and up to 268 billion euros to achieve 50% take-up of households at 100Mbps. 

The scale of these investment figures requires a balance between private contribution and EU and member states’ funds which should be carefully targeted to complement and not to crowd-out private investment. Such large scale investments will provide EU citizens and business with new opportunities.

Let me give an example: broadband-enabled innovation will play an increased role in delivering healthcare, contributing to improve patients’ quality of life and to reduce public spending. Commissioner Kroes rightly acknowledged this at the ETNO Innovation Day some days ago in Brussels.

In terms of the development of business applications, most enterprises are expected to increasingly use the Internet as part of the production process itself, also through functionalities developed by communities of users. Goods will most likely embed softwares enabling enterprises to monitor their usages and to adapt features.

ETNO members are ready to play their role to make sure that this vision becomes a reality. But we believe that some key conditions need to be put in place to encourage investments:

First of all, we need to question ourselves on whether the current model of the Internet development is sustainable in the long term. We are faced with an exponential increase of data traffic – by more than 35% over fixed networks and 100% over mobile ones – driven mainly by bandwidth-hungry applications such as video.

Networks require therefore constant upgrade and investments. At the same time, the competitive pressure made services available for lower and lower prices to the final customer. In the light of this market context, the industry needs to keep its investment capability.

Business models need to evolve, improving incentives for all players in the value chain to contribute to meet the huge investment challenge we are facing.

Secondly, NGA requires a more proportionate and targeted regulatory environment which would take more into account different levels of competition in markets in order to encourage risky investments. We observe that some national Regulators reflect the various degrees of competition within their national market and favour commercial agreements between operators instead of enforcing a strict access price regulation of the new fibre networks.

Artificially reducing wholesale access prices for copper broadband networks would undermine the NGA investment case. This was also recently recognised by Commissioner Kroes.

Furthermore, a systematic application of cost-based access obligations to NGAs acts as a deterrent to investments, since a key factor influencing the investment case for NGN deployment is consumer demand and his willingness to pay. Not all consumers make the same usage of high speed broadband. Some of them may wish to pay more in order to get higher speed and more capacity while others may have lower needs.

Finally, our approach to NGA must remain technology neutral. Investing companies will need to choose the network architecture and technology which adapt better to the market needs of the area where the investment takes place. 

Let me conclude by saying that the critical factor for the success of the Digital Agenda is the creation of a digital single market for content and services, as legitimate online content applications are the main drivers of consumers’ take up of broadband. ETNO members call therefore on policy makers to facilitate the creation of a single market for content services, through the simplification of copyright and licensing regimes.

As main innovators and investors in high-speed networks and services, ETNO members are committed to play their role in achieving the objective of providing all European households and businesses with fast and ultra-fast broadband access.

Commissioner Kroes, Ladies and Gentlemen,

a strong commitment by whole ICT industry and policy makers is in place. Let’s work together towards the goal of having a Digital Europe.

Thank you for your attention.  

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