Regulatory harmonisation across the European Union, creating a single digital market and a more predictable policy to attract more investment, should rank high in the new Commission’s to-do list.
According to the French Telecoms Federation (FFTélécoms), recent documents, including the Commission’s White Paper and the Letta and Draghi reports, all layout critical issues for the future of electronic communications.
Faced with an ever-increasing level of traffic, the main challenge for telcos is sustaining high network investments to adapt to the major technological development while meeting deployment objectives and modernising their networks.
More money needed
Despite previous investments, achieving the Digital Decade goals will not be easy. Studies indicate a need for mobilising up to €200 billion in additional investment by 2030. Under the current rhythm, the goal seems far-fetched.
For FFTélécoms, this must be a top priority for the Executive Vice-President Designate in charge of digital, Henna Virkkunen. The highly anticipated Digital Network Act, they argue, must focus on promoting regulatory support for investment and innovation.
In a recent interview with Euractiv, FFTélécoms President Nicolas Guérin called for more than small-scale sectoral adjustments in bridging the substantial investment gap.
“The EU must adopt an approach that better supports private investments in networks and rebalances the relationships between European operators and major global traffic generators,” he remarked.
“It should aim for a regulatory environment that boosts the sector’s attractiveness and competitiveness by simplifying and harmonising existing regulations,” Guérin explained.
Removing unnecessary regulations
When asked how European regulatory frameworks can be modified to encourage more investment and innovation within the sector, Guérin highlighted the EU’s lack of a true single market for electronic communications.
This is hindered by significant regulatory fragmentation among Member States and inconsistent rules across the value chain. “We believe it is urgent to remove unnecessary regulations,” Guérin emphasised.
He mentioned the spectrum policy as an example of potential improvement. Aligning with the best practices at the EU level and promoting predictability in spectrum use and licence renewals is “crucial” to encouraging investment.
Public-private partnerships
Another proposal to address investment challenges is the strengthening of public-private partnerships, for which Guérin mentions France as an example where the state is relying on a combination of private and public investments to achieve widespread fibre coverage by the end of 2025.
“Sector-specific taxes in France amount to €1.5 billion each year, excluding corporate taxes paid by operators. If these taxes were reduced, or at least redirected to fund network deployment, this would lessen the need for public intervention to achieve gigabit connectivity for all,” Guérin explained.
Though this falls under national jurisdiction, the FFTélécoms president argues that “a benchmark from the Commission on the investment environment for network deployment across Member States could be useful in identifying the best practices”.
Addressing imbalances
FFTélécoms continues to draw attention to the imbalance in the connectivity value chain, where large content providers (responsible for over 50 per cent of network traffic) are not contributing proportionally to infrastructure costs.
Given the shift in power dynamics in favour of these large content providers, they have secured unbalanced contract terms that put telecom companies at a disadvantage, leading to major platforms “free-riding” on telecom networks in a “zero-cost economy”.
Guérin highlighted the need to propose solutions that address the significant asymmetries operators face, both regulatory and in market power.
He said the White Paper and the Draghi report suggest structured, fair commercial agreements for traffic management and cost-sharing. These agreements would ensure that large traffic generators share the financial burden.
Should negotiations fail, a proposed arbitration process led by national competition authorities would resolve disputes. Guérin argues such an approach would foster fair investment conditions without restricting digital businesses’ scalability, encouraging sustainable growth across the digital ecosystem.
Sustainable digital practices
Sustainability also comes up as an important issue. FFTélécoms calls for eco-design standards to curb the environmental impact of digital services, which rely heavily on data-intensive practices.
Large digital players, especially, should take on greater responsibility for their bandwidth usage. According to FFTélécoms, France’s general framework for the eco-design of digital services (RGESN) could serve as a potential model for the EU.
“We are convinced that achieving sustainability objectives requires greater responsibility and accountability from all digital players, especially large content and application providers,” argues FFTélécoms.
The telecoms federation concludes that a “concerted effort” is required to harmonise regulations and practices across the EU, removing outdated legislation and ensuring consistency in regulatory frameworks.
[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]