25 October, 2022
ETNO presents new study on effects of the EU Data Act on the telecom sector
Brussels, 25 October 2022 – As European legislators make progress on the landmark EU Data Act, a new study commissioned by ETNO and authored by LE Europe brings a fresh perspective on the impact of the draft regulation on European telecom operators and their business models.
The study mentions European Commission figures underlining that the Data Act can unlock a series of major socio-economic benefits by 2028, including 2.2 million new jobs and a 1.98% GPD boost in EU-27. This is checked against opportunities, risks and the overall impact of the Data Act on telecoms in contexts such as business-to-consumers, business-to-business, business-to-government data sharing arrangements, as well as cloud and edge computing ecosystems.
Cloud markets: stronger competition is welcome news
The Data Act is an important step towards building more competitive cloud markets, which is key for European players to be able to develop their business on fair groups. Today, telecom providers are users of cloud computing services, as well as providers of edge and cloud computing services. According to forecasts, European enterprises will spend close to EUR 4bn in Europe on public edge computing services by the end of 2022.
The study highlights that telecom providers would benefit from a more competitive and dynamic cloud market thanks to easier switching between providers. As telcos often act as resellers of cloud computing services, the Data Act would benefit from additional clarifications on who is responsible for the switching process: if telecom operators are to ensure effective implementation of the switching, then the support of the third party provider which owns the underlying technology should be required.
Public sector collaboration is key, but do not crowd-out market solutions
The active participation of telecom operators has benefited Europeans in recent years, especially during COVID-19 pandemic. One sphere that stands out is healthcare: contact tracing apps, availability of connectivity, and anonymized use of network data were vital in supporting the work of epidemiologists and public authorities.
LE Europe analysis finds that data solutions for the public sector are a nascent and thriving market, which is crucial to grow the European data economy. Therefore, the study advises that the “exceptional situations” where telecom operators are obliged to provide their data to governments should be circumscribed to truly exceptional cases; data should be handed over against an adequate compensation. The processing of high-quality data to be used by public authorities is a costly operation.
B2C and B2B: safeguarding telecom innovation
As more and more IoT devices and services connect to the Internet they generate data over the network. This is also called Electronic Communications Service (ECS) data and it adds to the data generated locally by the product (e.g., sensors). In such scenarios, the telecoms operator has only access to ECS data, which is critical to enabling smart devices to function and communicate with other devices and services, and without being related to a specific functionality or product.
The study finds that a clearer definition of ECS data is required to avoid unintended consequences: were ECS data to be conflated with product data, we would risk to create disproportionate regulatory obligations for telecommunications service providers against little added-value for IoT users. The study also finds that the existing regulation of collection and use of this data is functioning well, with no significant competition concerns arising.
Lise Fuhr, ETNO Director General, said: “The Data Act is a step in the right direction, but LE Europe’s study shows that some fixes are necessary to better target the rules and ensure that European telecom innovation can be effectively unleashed”.
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