Speech - A strong telecoms sector in a connected continent
European Commission - SPEECH/13/733 22/09/2013
Other available languages: none
Vice-President of the European Commission responsible for the Digital Agenda
A strong telecoms sector in a connected continent
Vodafone Group Board meeting /New York City
22 September 2013
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Now my proposals for the Telecoms Single Market are on the table. And the world hasn't collapsed. Indeed, financial analysts are being positive on the impact these proposals have on your sector, on you and your competitors.
And at the same time there have been significant developments, in the European and US markets, involving Vodafone but also some of your competitors. I think this is where we need to start: what sort of market do we have in Europe, where are we heading, and what do we need to do to make the sector – and the whole European economy – stronger and more competitive.
I know you share my analysis of the present state of the European telecoms sector. Revenues are down, investments weak. You see little attraction in Europe, and few opportunities to expand.
That troubles me. Not just because of one sector. But because of everything that sector can do for us. From smart cities to cloud computing, eHealth to eGovernment, these are networks that could transform lives, strengthen society, and boost competitiveness.
But that all depends on connectivity. And on a telecoms sector that is strong, dynamic and innovative.
The single market helps much of our economy. It's time it also boosted the communications that underpin competitiveness.
Today it's too hard for you to work across the EU's borders. You shouldn't have to seek separate authorisations in each country you work in; that's not what a single market is about. If you can operate anywhere in Europe, you should be able to operate everywhere in Europe! Any operator should be able to serve every European, without discrimination. You should have more consistent access to fixed networks in different countries, streamlining wholesale access to enable consistent, quality services that cross borders. For wireless, spectrum rules and assignment timing need to be more coordinated; and better used, through innovations like spectrum sharing and new rules on public WiFi. Europe is well behind in the 4G roll-out race, and we can't afford to stay there. Governments can't carry on treating spectrum like a cash cow: pricing needs to reflect the wider benefit.
On the institutional side, we will give BEREC, the body of national regulators, a full-time, professional chair, for more strategic and coherent planning. But we will also retain the right, as a last resort, to veto national remedies if they are not in line with the objective of an open single market.
And more transparent internet contracts will ensure operators compete fairly, on the basis of the actual quality of your product. A 30 Megabit connection should mean 30 Megabits. It shouldn’t just be a race to who can exaggerate the most.
Plus new safeguards would ensure access to the open internet. Allowing innovative new "specialised services" (like for IPTV, e-Health, or cloud computing) – but with guarantees that regular Internet access won't be impaired. I want to see openness and innovation, online: but also rules that are clear and consistent across the EU.
And we will ensure fairer prices for consumers. It's hard to claim you're bringing down single market barriers as long as roaming charges remain; or indeed the artificially high prices for intra-EU calls. In other countries, like the US, we've seen companies taking a leadership role here. Phasing out roaming charges and showing that their aim is not to frustrate their consumers, but satisfy them. No company can seem like it is against their own customers: that's no kind of business model. The first European player to recognise this will be in for a big reward.
My preference on roaming is for market solutions, not endless interventions in retail prices. Deals that let people roam across the EU as though they were still at home – with a reasonable limit on use to avoid arbitrage – and deals that can come onto the market as soon as possible to as many customers as possible. That's what I am enabling and encouraging.
In finalising these proposals I have tried to listen to industry's needs. Not just to the complaints made in public; but to those in your sector who recognise roaming was ultimately an artificial and unsustainable crutch. And I want to accommodate forward-looking tariff plans — that treat roaming as an intrinsic part of the consumer's package in a single European market.
The financial sector had already discounted roaming revenues in their analysis of your sector a good while ago. Now they have confirmed that the overall package would have a positive impact on the predictability of earnings, and the prospects for investment. Which is exactly what we are aiming for.
That is the proposed Regulation on a Telecoms Single Market I've put forward to Council and Parliament. Alongside those, we have a new framework for investment in fast fixed broadband. Giving you and other investors the stability and certainty to plan for the long term.
Separately from those measures – we are also researching the next generation of mobile networks: 5G. When I spoke to the Mobile World Congress in February, I called to move faster in this area. I am delighted with the rapid and positive response from industry. Now we are ready to agree a Public Private Partnership on strategic research for 5G, for which I hope the Commission will commit several hundreds of millions of euros.
I hope that this partnership gathers all the experts: including from the "user side". So I hope Vodafone can be fully engaged.
And of course we are also taking action to ensue secure and resilient networks. The recent incident at Vodafone in Germany reminds us of the business case for cybersecurity: it knocked a billion off your share price within hours. Taking precautions pays for itself – and all key players need to play their part.
That is what we are doing for a connected continent. It's not just legislation: it's part of a whole vision for the sector.
Connectivity is becoming part of our lifestyle. With ever more uses serving ever more needs. I'd compare it to transport : where a range of needs is met by a range of solutions. From buses to planes, from Volkswagens to Land Rovers. And exactly the same goes for connectivity. Different consumer needs can and should be met by a sector prepared to innovate. That is a huge opportunity. To mourn the loss of roaming charges would be totally missing the point. Give people what they want and they are prepared to pay accordingly.
This won't be achieved by a sector that looks backwards – at old services, at dated business models, at declining revenue streams. The telco sector cannot support itself or the economy by deliberately maintaining scarcity. By unfair charges and blocking services. Frustrating the economy's need for connectivity. Ultimately that can only lead to stagnation and decline.
This vision can only be met by a telecoms sector that is healthy, vigorous, and dynamic. With strong European players that can think big, to compete globally, the backbone for growth across the economy. A sector that doesn't face barriers, but has the ability and incentives to invest and innovate.
Rather it is by ensuring plentiful supply. Capturing tomorrow's opportunities. And offering new services people want to buy.
And that is what my proposals are all about. This is about making the pie bigger. So let's not fight over crumbs.
I know you get this. I know you are investing to upgrade networks, to offer better quality products.
That's not because I told you to: it's because you recognise the competitive advantage. But I do want to see more of that. And by bringing down barriers and helping you plan and invest, we are making that easier, and more rewarding.
This is an industry that's transforming rapidly. You know that well. And I'm determined to ensure it moves in the right direction. To deliver that European leadership and dynamism that we so desperately need to recapture. I hope these proposals will become a reality by next Easter. And that would be a big move towards a connected, digital Europe.