Massive consolidation is not the silver bullet for boosting broadband investments

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Massive consolidation is not the silver bullet for boosting broadband investments

More players invest more and smaller players invest more efficiently

 

Today in a working breakfast co-organised by Adina-Ioana VĂLEAN, Vice-President of the European Parliament, and ECTA, the European Competitive Telecommunications Association, MEPs and advisors, Commission officials and telecommunications attachés debated with experts  the issue of consolidation in the telecoms market.

Next generation broadband infrastructure and innovative digital services are important enablers of all other sectors as well as a connected and knowledge based society. Boosting the European economy and creating jobs, growth and investments are key priorities as well as challenges for European policy makers. This breakfast is aimed at giving food for thought on how to achieve these goals.

After considering the performance of the European Union compared to the rest of the world, Andrew Entwistle, Partner at New Street Research, Agustin Diaz-Pines, Policy Analyst at OECD and Annegret Groebel, Head of Department International Relations / Potal Regulation at BnetzA shared their views on whether consolidation in the telecoms sector is necessary to foster investments and the best way to promote the rollout of new broadband infrastructure maximising benefits for end-users but also ensuring fair returns to investors.

Following the exchange of views, Erzsébet Fitori, Director of ECTA emphasised that “in order to achieve the Juncker Commission’s high investment ambition, all players – big and small – should be enabled by regulatory policy to invest. The Digital Single Market should be the land of opportunities for all businesses and citizens to innovate, compete, invest and receive world class services. It should be a fair place where fair competition is the law of the land.”

There is no evidence that massively large operators invest more or become more profitable. On the contrary, massive consolidation driven by regulatory policy, forcing viable competitors to disappear would make a lot of existing investments redundant. Europe needs Davids, who have better ideas, invest more efficiently and innovate to genuinely deliver what end-users want, than yesterday’s Goliaths.

Hubertus von Roenne, Chairman of ECTA underlined that there is no trade-off between investments and competition. Regulation should re-focus on competition as the triggering part of a virtuous circle: it pushes companies to be more innovative and efficient and offer services at competitive prices, which generates user demand. Demand in turn drives more investment. Competition is the best guarantor that all – end-users and operators alike – can reap the economic benefits of digital innovation.