The GSMA, on behalf of Europe’s mobile operators, has issued a statement in response to the Digital Networks Act. The statement in full is presented below:

For Europe to compete on the global stage, it needs a best-in-class digital ecosystem to underpin its industry, security and innovation capabilities. Reforming Europe’s framework for telecoms with the Digital Networks Act (DNA) is therefore a necessary and welcome step to achieve this goal.

However, as things stand, what was promised as a bold piece of legislation will in its current form not do enough to alter the status quo and will mean Europe continues to fall behind global leaders.

Aside from far-reaching proposals on radio spectrum policy, it is now clear that many of the reforms originally promised have unfortunately been left on the table, and that the DNA proposal represents regulatory evolution where revolution is required.

Decades of investment challenges

As the Draghi and Letta reports made clear, and as the Commission’s own Competitiveness Compass reflected, digital connectivity drives Europe’s economy. It is a frontline defence in the cyber age, it is essential for education, health, socialising and community, entertainment – there are almost no areas of modern life that are not contingent on these networks.

However, in Europe, they lag far behind those in other major global markets. We are almost seven years into the 5G era, yet deployment of that technology continues to trail other major regions. More than three quarters of people in China are feeling the benefit of 5G standalone connectivity, which drives innovation and new, monetisable services and products, while markets like the USA are also already evolving their connectivity uses more quickly than we can in Europe.

This is the result of an unfavourable investment environment, itself the direct product of regulatory complexity. While Europe’s mobile operators continue to invest heavily in critical digital infrastructure, they do so with ever-diminishing returns and in a market that has shrunk in value over the past decade. At present, they are not able to invest enough to ensure Europe’s digital capabilities catch up and keep pace with other major territories.

A spectrum Single Market

The DNA makes welcome and overdue moves to address one of the principal limitations mobile operators currently face: spectrum licensing.

It is encouraging to see a smarter, long-term approach to this key issue, one that reflects how spectrum is the lifeblood of the connectivity industry. The Single Market approach outlined in the DNA will allow for more investment certainty for mobile operators and it is now vital that EU co-legislators support this measure.

Complexification

Unfortunately, in most other areas, the DNA does not do enough to address ongoing industry issues or create a more investment-friendly regulatory environment.

A key priority for the Commission over the past 12 months has been ‘simplification’ but we now face the prospect of even more sector-specific rules, additional administrative bodies and reporting obligations, and the retention of unnecessary, redundant or duplicative elements including Consumer Protection and rules stemming from a largely outdated ePrivacy Directive.

This is not simplification, it is complexification.

Additionally, the DNA introduces an unclear voluntary conciliation and facilitation mechanism for network operators and large traffic generators. This falls far short of addressing significant and persistent bargaining power asymmetries. The lack of a more binding conflict resolution mechanism and the missing shift from sector-specific to horizontal regulation perpetuates an unlevel playing field which is detrimental to the telecoms industry and the overall competitiveness of the EU.

The road ahead

What was promised as a substantial reform for EU telecoms to alter their trajectory   falls  in its current form short of the objective to foster investment, innovation and competitiveness of the sector.

Europe must not view the DNA as an end point but rather as just the start. The continent’s immediate and long-term economic performance, as well as its security, sustainability and ability to innovate, depends on its digital capabilities. We can and must strive for digital excellence and we call upon Member States and the European Parliament to build upon the proposal and deliver a DNA that drives a secure and competitive future.

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Categories: Press Releases

Tags: europe, GSMA