European Commission Warns Big Telecoms Operators – “Adapt or Die”

The outgoing Vice-President of the European Commission’s (EC) Digital Agenda project, Neelie Kroes, had stern words for members of the European Telecommunications Network Operators Association (ETNO) yesterday when she warned against protectionist positions and stated that “sometimes I think the telecoms sector is its own worst enemy“.

Europe’s Digital Agenda project aims, among many other things, to make superfast broadband speeds of at least 30Mbps (Megabits per second) available to every EU household by 2020, with 50%+ subscribing to a service capable of delivering ultrafast speeds of 100Mbps+.

The Digital Agenda also links into another one of Neelie Kroes pet projects, the on-going efforts to foster a Single Telecoms Market, which would be headlined by protection of the Open Internet (Net Neutrality), the abolishment of EU mobile roaming charges and regulatory changes to foster the deployment of faster fixed line broadband services.

Needless to say that some of the moves, not least with regards to roaming charges and net neutrality (i.e. treating all Internet traffic as equal in order to prevent online content providers being unfairly penalised), have received a hostile reception among big telecoms (mobile, broadband and phone) firms, many of which are members of ENTO.

But most recently ENTO appeared to signal a willingness to change when they set out their five key pillars as part of a new “Agenda for Europe“.

ENTO’s Agenda for Europe

1. Developing Powerful Infrastructure by aligning the regulatory framework to the 3rd investment cycle in 4G and fibre.

2. Boosting a Globally Competitive EU Industry through an updated competition approach and by ensuring a level-playing field among actors in the digital value chain.

3. Supporting Digitally Enabled Companies with early incentives for ICT adoption and EU-wide trials in areas as diverse as automation, smart-cities or mobility.

4. Increasing End-user Benefits with consistent privacy and security rules and by allowing the development of innovative services.

5. Promoting Enriched Citizenship and Welfare with strong demand-side policies, solid interoperability practices and a focus on digital literacy.

It’s a more positive wish list than we’ve seen from ENTO before, an organisation that will no doubt be quietly looking forward to a change of leadership within the EC, yet Neelie Kroes has been swift to warn that she’s not gone yet and the future leadership isn’t likely to take a radically different approach.

Neelie Kroes told the ETNO Summit 2014:

“You’re probably all looking forward to the very near future, when the Juncker Commission takes office, when you won’t have to put up with me anymore. Well just today you are stuck with me. So allow me to be direct. That is my style.

Your message is clear: that we need to change regulation. But you have to change too. So rather than being critical about the past, let me be positive about the future. I welcome the fact that ETNO appears to be looking at the need to change. The “Think Digital” manifesto announced earlier today should help ETNO to play a positive role in shaping Europe’s digital future. It is a positive vision: but now it needs to be acted on, and implemented.”

Kroes went on to warn that Europe’s future telecoms market wouldn’t be characterised by “protectionism” or “players stuck in gilded national cages” and it won’t be “looking backwards to old business models and dated revenue streams. No, no, no.” Instead she called for a sector that offers convenience, competition and choice.

On Net Neutrality, Kroes reminded members that many of them and the demand for their broadband services would not exist without the likes of Facebook, YouTube, Google and Netflix etc. “OTT players are the ones driving digital demand – demand for your services! That is something you can work with, not against,” said Kroes. She also warned that requests which effectively amounted to “regulate my rival” were “not a general call that will ever find much resonance.”

In general terms Kroes was attempting to signal that the rules which govern European telecoms operators were, come hell or high water, about to change and that related businesses will have to adapt. On the other hand many of these policies have yet to be given the final seal of approval and the possibility for last minute changes cannot be overlooked, although much of what Neelie Kroes has helped to foster will probably survive.