How to make the lead balloon Europe fly?

(1) Push for more Innovation:

The history of all industries tell a clear story: innovation is and was always a key driver for leapfrogging out of an impasse. If we want to make the lead balloon Europe fly we have to need to improve the innovative power of Europe.

(2) Let’s create a “European Service Universe”

The high standards for ensuring privacy and data protection in Europe are often seen as a hindering factor for growth and prosperity of the European telecom sector. I think that this view is too short-sighted. What we need though is a harmonization of the fragmented situation in the areas of privacy, data protection and modernization of copyright standards! Based on Europe’s strengths in cultural and language diversity and – not to forget – in the light of the current revelations, I’m proposing to create a “European Service Universe” that differentiates Europe from other areas of our globe. It’s not about creating a “European Internet”, it’s more about developing and offering specialized services based on the broad spectrum of European culture and diversity, with guaranteed levels of security and safety, for businesses, for the general public, etc.

(3) Importance of Net-Neutrality (NN):

Net Neutrality is a key enabler for enabling innovation and value creation. If we want to protect the interests of the “big guys”, NN isn’t very important; the Google’s of this world have created in the meantime their own networks, they are present close to the end user of their services. They are trying to by-pass the traditional telco’s as well. But if there is no Net Neutrality anymore, the innovation funnel fed by the “small guys”, the start-ups and other small innovative companies is in danger or will dry out. For me, this will be a touchstone for any “digital single market” (DSM) concept, which we should take care about.

(4) Start the Virtuous Circle!:

In an innovation-friendly environment void of hurdles for new businesses, new services can emerge and lead to increased demand and willingness to pay for broadband access and higher bandwidth. Together with sound regulatory policies, this should create the right incentives for efficient investment in higher bandwidth, which, in turn, is a precondition for new services that remain to be developed. Therefore, this “Virtuous Circle” of regulation, innovation, and investment policies reinforces itself, having a significant and long-lasting impact on Europe’s ICT industry.

(5) How to make the telecoms lead balloon in Europe fly? Let’s focus on Dynamic Efficiency Gains!

HSBC published recently a study advocating for a fresh look at industry consolidation in EU. https://www.research.hsbc.com/R/20/QwKEJII5xmsz

Main messages are:

• CAPEX is the most powerful factor driving down unit prices

• Consolidation (to a certain extent) would sustain heavier infrastructure investment

• Instead of focussing on static effects (a traditional regulatory mantra, such as the number of competitors in a given market), it has to be recognized that dynamic efficiency gains (specifically CAPEX, driven by healthier margins) are primarily responsible for powering unit price declines

• With roaming charges set to disappear, it will be much easier to make the case that a single market is genuinely emerging, which in turn should legitimise a greater degree of consolidation in this highly fragmented sector. The disappearance of roaming plainly indicates that we need to reconsider market definitions and „intra-market“ mergers.