• The CEOs of Europe’s four main operators took to the keynote stage at #MWC24
• They are demanding multiple regulatory changes to improve their lot and save Europe’s digital future
• ‘You cannot ride on a dead horse,’ proclaims Deutsche Telekom CEO

BARCELONA – #MWC24 – The CEOs of Europe’s four largest telcos, Deutsche Telekom, Orange, Telefónica and Vodafone, presented a united front on the keynote stage here in Barcelona on Monday to put pressure on the region’s lawmakers over a regulatory regime that, they claim, is outdated, unfit for purpose and eroding the digital potential of Europe, which the telco chiefs believe has lost its telecom sector momentum. 

The CEOs – Deutsche Telekom’s Tim Höttges, Orange’s Christel Heydemann, Telefónica’s José María Álvarez-Pallete and Vodafone’s Margherita Della Valle – took it in turns to share their gripes about the current regulations related to mergers and acquisitions, spectrum licensing, the big tech players and more, highlighting that Europe’s fragmented regulatory setup is hampering progress and affecting the financial viability of the region’s more than 40 operators. Collectively, they demanded a “new deal” for Europe to help the region achieve its full potential and be able to compete with China and the US. 

The complaints and calls for regulatory reform are nothing new – MWC has featured telco chiefs criticising lawmakers for decades – but the united front of four important regional giants, which collectively operate in 19 markets, have 370 million customers, invest €20bn a year and employ about 300,000 staff, will have helped to send a stronger message to the corridors of the European Commission. And there was no doubting the passion and sincerity of the keynote speakers, with DT’s Höttges, like a man possessed, prowling the stage to slam the “spectrum tax” that is imposed on mobile operators every 20 years or so and warning that Europe is in danger of being ground down by unnecessary rules. 

“You cannot ride on a dead horse,” he proclaimed, noting that Europe’s telcos have “a severe problem” – 60% of them are not earning back their capital costs, he claimed – and are “dwarfed” by the US tech giants that are “eating the cake” being served up by the European telcos’ investments in their networks, a reference that harked to the fair share debate that has been raging for the past few years. 

Álvarez-Pallete noted that the major network operators are in the midst of developing a “brave new world” underpinned by the new cloud-oriented platforms being built out by the major operators that are the equivalent of a “mass decentralised supercomputer.” But, he warned, “we need a new regulatory regime to be able to make the investments needed… let us compete, let us do our jobs,” he stated. The current rules are “narrow minded” and come from a different generation, he added. 

One of the main complaints from the telcos is that they are obstructed from executing in-country consolidation plans to gain scale, but with Orange on the cusp of completing a merger in Spain with MásMóvil, there are at least signs of some movement in the right direction, noted Heydemann, though she questioned whether things were changing quickly enough in a market that is shifting faster by the year and being impacted by AI developments. 

That’s just one deal, though. The telcos are looking for an environment where regulatory barriers are much lower and where the lawmakers don’t feel compelled to ensure there is a minimum of four major service providers per market. 

The CEOs also pointed to the innovation potential of Europe and the positive impact on the region’s sustainability efforts that the telcos are having with their green strategies, but ultimately “driving change is not enough,” noted Vodafone’s Della Valle. “Customers need more… we are ready to play our part,” but in order to do that effectively “we need a new deal,” she proclaimed. 

The keynote session came hours after Thierry Breton, the European Commissioner for Internal Markets, had given a speech during which he suggested that spectrum licences should be awarded on merit and investment plans rather than through auction processes, and called for Europe to have a single spectrum award policy. 

But the telco CEOs have had their fill of suggestions: Höttges urged the EC to act rather than just talk before the capital markets lose faith in the telecom sector altogether. 

So, all in all, a strong and united front from the quartet. The question is whether, even with the combined weight and influence of those four operators, such declarations will have any positive impact on Europe’s lawmakers and be the catalyst for change.

- Ray Le Maistre, Editorial Director, TelecomTV