07 December, 2015
ETNO ThinkDigital Blog Post - Three ingredients for successful reform
"If our industry continues investing at the current pace, the good old Digital Agenda targets will be missed by a €106bn investment gap. A real leap in investment is what we need to be working for collectively.", Steven Tas, ETNO Executive Board Chairman #ThinkDigital
Competition, investment, innovation. As the exchange on telecoms reform comes to maturity with the Public Consultation deadline, these three words have emerged as a good summary of the EU debate.
The European Commission is currently committed to working on a historic reform of the Telecoms Regulatory Framework. The pillars of this framework – the Authorisation, Access and Universal service directives – were first conceived at the end of the '90s, entered into force in 2002 and were last reviewed in 2009.
This time, it is not just about a review. As outlined in the Commission's Digital Single Market Strategy, we will have the chance to contribute to an “ambitious overhaul” of the whole Framework.
Such overhaul promises to “tackle regulatory inconsistencies”, promote a harmonised “spectrum policy”, ensure a “level playing field” and “incentivise investment in high-speed broadband”.
In ETNO's view, the three principles outlined at the beginning of this note clearly need to inspire the historic, exciting and delicate process ahead of us.
Competition clearly needs to be one of the pillars of this reform. We are extremely supportive of that, as competition is in the DNA of ETNO and its members. Think of European markets: our members fiercely compete against each other in Germany, Belgium, Spain, Romania, Austria and many other countries.
For this reason, we believe that the Framework review is a unique opportunity for creating the basis for better competition in telecom markets. The right competitive conditions are those that maximise the incentives for operators to innovate, to invest and to outperform their competitors.
If we fail in this area, our companies – who have always held the lion’s share of total sector investment– will find it challenging to scout for additional funds within the investor community. At the same time, challengers will continue to be encouraged to seek for access to the current existing networks at regulated prices, instead of taking part in a competitive rush towards investing more and deploying more broadband. This virtuous rush is what we need if we are to deliver more to European consumers.
Investment, therefore, needs to be a fundamental objective of the Telecoms Framework reform. A new one, actually, as it is not among the current Framework's objectives.
Let us not hide behind positive - but still marginal - investment growth levels. The Boston Consulting Group, in their recent study on “Achieving a Digital Single Market”, has been crystal clear. If our industry continues investing at the current pace, the good old Digital Agenda targets will be missed by a €106bn investment gap. A real leap in investment is what we need to be working for collectively.
This is why we need a light-touch and more market based approach, one that provides network- builders with incentives to create the next generation networks for the European citizens and economy and one that will offer the appropriate returns to investors. Commercial negotiations between network operators should become the rule and any remaining network regulation should be technology neutral and based on a future-proof analysis of the retail market dynamics. Cost orientation requirements should be lifted and access regulation substantially simplified to one layer.
However, our work to achieve a better investment environment and faster broadband deployment will not be complete unless we deliver on spectrum harmonisation. Commission, Member States, Parliament and industry: let’s work together to make sure that Europe remains a leader in mobile communications. European consumers want ubiquitous connectivity and mobile services are empowering growth in several industries. Which leads me to the next pillar.
Innovation is the lifeblood of growth and prosperity. Most stakeholders – and the European Commission itself – have included this among the principles that should be followed when reforming the current telecom rules.
To each their own, they say. This is why, on the one hand, our companies have the duty to do their part by restlessly updating business models and embracing change. Lots is being done already. I think of my own company, striking deals with internet players one day and pushing on cloud services on the other, for example.
On the other hand, and as far as innovation is concerned, part of the solution is in regulators' hands. I am convinced that, with this reform, we have an once-in-a-lifetime opportunity to leave more space for innovators in Europe.
Telcos can empower significant opportunities along the value chain, by restlessly working on network quality, offering a variety of differentiated services and ultimately delivering better services for consumers.
And there is much more to it. As recognised in the DSM Strategy, we should tackle the level-playing field issue. Telcos can be more innovative if we address the regulatory asymmetries to which the sector is currently subject.
Let us unstrap the telcos' hands – bound by excessive regulation, rather than binding yet more hands and restricting the overall space for innovation.
By Steven Tas for ETNO #ThinkDigital, 07.12.2015
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Steven Tas, Chairman of the Executive Board, ETNO and Director Regulatory, Proximus.
Steven Tas has been chairman of ETNO, Europe’s leading telecoms association, since January 2015. He has been leading the regulatory department of Belgacom Proximus – the main Belgian telecom operator – since 2008. He joined Belgacom Proximus in 1994 and has occupied different positions within the company’s strategy division. He is a member of the ETNO board since 2009 and a member of the board of Centre on Regulation in Europe (CERRE) since 2010. Mr Tas holds a master’s degree in Civil Engineering and Industrial Management from the University of Leuven.
