05 May, 2015

ETNO ThinkDigital Interview – Aiming for a stronger Europe with less national division

Telekom Austria's CEO Hannes Ametsreiter looks at the changes in the telecom industry and how policy should adapt: “We are no longer just telecommunication providers. We have to transform into digital companies, driving digital business and the lifestyle of the 21st century

The telecom industry moves fast. What can your customers get today, in terms of offers or technology that they couldn't get 5 years ago?

Today’s customer wants seamless content on multiple devices and we are offering easy access, convenient services and solutions. So we are already far beyond being a classic telco and are offering services including content. The explosion of data currently leads to a renaissance of fixed line networks, as only fixed networks can cover the huge amount of data customers are consuming when watching video or IPTV. And of course mobile data consumption will continue to rise fast, as people on the go still want to be connected anytime.

What do you see as the most challenging barriers that are preventing European citizens from fully benefiting from a Digital Society?

First of all network infrastructure is a precondition. Here Network Readiness Indices show a rapid decline in Europe. This is not surprising as rough competition with too many players on the market and an intense regulatory framework reduce incentives to invest. Secondly regulation has not created a single market, as it has only focused on consumer prices. Wouldn’t it be better for a single market economy to set up a proper framework, meaning common licences, frequencies or one regulator? We could take a look at historic developments across the Atlantic. The United States did not need a Zero-Roaming policy to get rid of national Roaming and to set up a true single market. They had a clear vision to be the world’s number one region in digitalisation: this is what we need as well. Currently operators in the US are the biggest investors among all business segments.

If you look ahead, how will your company evolve over the next 5 years: which market and technology trends will drive your business?

Our industry has to realise that we are no longer just telecommunication providers. We have to transform into digital companies, driving digital business and the lifestyle of the 21st century. At Telekom Austria Group our new strategy TAG 4.0 is focused on this. We see huge potential in the internet of things or in what is called industry 4.0, as the industrial Europe has a strong historic fundament. It has already started: Our Machine 2 Machine unit shows enormous growth rates. Data and ICT such as cloud services or virtualised IT, are now often accompanied by security solutions. In the B2C area it is all about connectivity to make life easier, as can be seen in smart homes or the connected automotive sector. Last but not least, every aspect of the entertainment business will be heavily impacted.

The European Commission will soon launch its Digital Single Market strategy. What should be on top of Europe's agenda for digital?

The right framework for a true Digital Single Market, as mentioned just before, is necessary to strengthen companies and to give them flexibility for investment and growth. This refers also to the telecom framework regulation, which is outdated. Moreover, we really need a level playing field for OTTs. Google, Facebook and others have little regulation and can build fortunes on our wealthy continent while hardly investing a cent. However, Europe can only succeed by being more innovative than other parts of the world; a level playing field is just a short-term measure to reduced existing imbalances. Last but not least we need to talk about competition law: While in the States there are five operators and in China there are three, we have more than 150 in Europe. Why is it a necessity for example that two million Slovenians have more operators than one billion Chinese? Therefore all in all, we need a stronger Europe and less national division.

Telecoms consolidation sparks debate in Brussels. How has the Austrian market changed in recent times in your view? Does it deliver more or less for consumers?

We were the first country in Europe to experience consolidation from four to three operators. We can see that we now deliver better products to customers. And that this development did not harm customers has been recently confirmed again by a HSBC analysis. Furthermore, we almost tripled the level of investment after consolidation. Currently we also face aggressive MVNOs entering the market.  So competition in the mobile area with a market penetration of almost 150 per cent is as challenging as it has been in the last few years. 

By ETNO #ThinkDigital, Brussels, 05.05.2015


Hannes Ametsreiter, Chief Executive Officer, Telekom Austria Group and Chief Executive Officer, A1

Hannes Ametsreiter’s biography can be found here.

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