21 January, 2022

Accelerating fibre and 5G roll-out: ETNO unveils new technical and regulatory reports

Brussels, 21 January 2022 – ETNO, the association representing Europe’s leading telecom operators, has unveiled today two major reports with the state-of-the-art thinking on investment in Very High-Capacity Networks. The reports are both independent and they have both been prepared for – and fully funded by – ETNO.

The publication comes as the European Commission is speeding up policy action to achieve their new EU Digital Decade targets, which set the ambition of gigabit networks for everyone and 5G everywhere in Europe by 2030.

Shaping policies to support investment in Very High Capacity Networks

This Report by Frontier Economics argues that traditional telecom regulation should be drastically simplified and recalibrated to make room for winning today’s historic challenge: filling Europe’s €300bn investment gap in fibre and 5G.

The Report puts forward practical suggestions on how to improve regulation over the long term in mobile and fixed markets. Among others, it proposes a gradual approach to calibrating regulation based on the competitiveness of different geographical areas with a view to maintain and increase investment incentives for all infrastructure operators.

It also provides an analysis of other public policies that directly or indirectly affect the pace of 5G and fibre roll-out, such as security measures, green obligations or net neutrality measures.

Thinking beyond the WACC – the investment hurdle rate and the seesaw effect

The weighted average cost of capital (WACC) is a financial metric used by telecom regulators to define wholesale prices or price caps for access by alternative operators to incumbent networks.

This new Report, prepared by leading experts Brian Williamson and Stephen Howard at Communications Chambers, exposes the close link between regulation of legacy networks, including WACC, and the pace at which new networks like fibre are rolled-out by operators and taken up by customers.

It provides new insights into the investor mindset and it puts forward innovative ideas on lowering the investor hurdle rates and on adjusting the currently used WACC methodology to one that would truly promote efficient investment.

Join the ETNO-Florence School of Regulation Webinar

On January 27 (10-15hrs CET), the Florence School of Regulation will host a joint webinar with ETNO on “Setting WACC in low interest environments”. The webinar will gather top European experts from the academia, national regulators, European Commission and telecom operators.

Join us for free, register here.

Maarit Palovirta, Senior Director of Regulation at ETNO, said: “Long term horizon and regulatory commitment are essential to attract the attention of investors and to support the telecom sector’s efforts to build new services for the benefit of European citizens and businesses. Europe needs conviction and courage to develop a future-proof regulatory environment that truly incentivizes investment and embraces opportunities for innovative approaches.”

© ETNO 2023
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