Vodafone issues red alert over Europe’s digital future

• Vodafone warns of ‘alarming’ connectivity gap between Europe and other regions
• Already lagging behind the US and China in AI and other tech developments, the region could keep missing out on opportunities
• The telco believes the region’s lawmakers must make it easier for companies to invest in 5G and digital platforms if the European economy is to take advantage of a €1tn opportunity

Vodafone is voicing concerns over how far Europe is lagging behind the US and China in terms of new technological developments, such as AI, and is urging the region’s lawmakers to revamp legacy regulations, make it easier for companies to invest and so unlock a €1tn opportunity from digitalisation.

In a new 92-page report, Why Telecoms Matters, the pan-European telco highlights the need for more action by the European Union and member state governments, with a view to “restoring Europe’s competitiveness”.

The main issue, highlighted by Vodafone, lies in an alarming “connectivity chasm” that is opening up between Europe and competing regions, that “could leave EU citizens, businesses and society at risk of further economic decline”.

Additionally, a “lack of private investment” available for 5G standalone (SA) infrastructure leaves Europe facing “a multibillion-euro funding gap, widening the lead of the US and China in critical growth areas”, such as AI and cybersecurity.

What’s more, the report claims that while 73% of large AI models are being developed in the US and another 15% in China, “no EU country yet hosts its own general purpose AI system”.

Businesses in the region are also behind in terms of cloud computing and 5G takeup, according to Vodafone’s findings. To reverse this, the study stressed the need for the region to improve “the investment climate for 5G and digital infrastructure”.

It added that on this journey, next-generation telecoms connectivity and the digitalisation of industry could be critical – so critical, in fact, that, according to Vodafone’s estimations, it underpins a €1tn opportunity for the European Union, which is the “equivalent to adding another Netherlands to European economic output”. Updating legacy regulations could result in increased innovation and industrial efficiency, as well as improved public services.

Vodafone urged the European authorities to prioritise the deployment of next-generation telecom technologies, particularly 5G standalone (SA) core and antenna systems that can enable the use of low-latency applications and private network slicing for enterprise users in multiple industry verticals.

Furthermore, by connecting machines and applications with cloud-based intelligent services, “the digitalisation of industry through advanced 5G connectivity represents the ‘fourth wave’ of the industrial revolution – worth an estimated $2tn annually for the manufacturing sector alone,” the report suggested.

“Europe has a trillion-euro opportunity to digitalise its industry and compete globally, but this prize depends entirely on the speed of adoption. The five-year mandate of the next European Parliament and [European] Commission must allow Europe to course correct, rebooting legacy telecoms regulation and creating a single market framework that attracts the investments needed to roll out 5GSA at pace,” argued Joakim Reiter, Vodafone chief external and corporate affairs officer.

Such pressure tactics are not new: Vodafone and Europe’s other major telcos are often seen railing against legacy rules and regulations that, they claim, make it harder for them to achieve profitable scale and invest accordingly, but there’s little doubt these days that next-generation communications and digital infrastructure is absolutely vital for modern productivity and competitiveness – the Covid-19 pandemic years taught everyone that, if nothing else.     

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV