Orange’s CEO spells out the reality facing Europe’s telecoms industry with backing from EU’s Internal Market Commissioner
It didn’t take long for the “fair share” issue to be raised from the keynote stage here at MWC 2023. Orange CEO Christel Heydemann said she welcomed the consultation launched by the European Commission last week as a “first step” towards tackling the issue.
“In order to achieve the EU Digital Decade, we believe that the fair and direct contribution to network costs will create the better conditions we urgently need to keep investing privately rather than requiring public funding,” she said.
However, she was emphatic that Orange’s position did not mean that the operator is asking the Commission to change Europe’s network neutrality rules and it is not asking for a “new tax mechanism”.
Something has to give
She painted a rather dire picture for European telcos if there is not a major change in policy, calling their current plight “completely paradoxical” from having to deal with “contradictory requirements.” Citing research from PwC, she said “46% of telco CEOs think their companies won’t make it another decade.”
All the network investment over that last 10 years “happened to be hard to monetize” as consumers want increasingly more for less money. Meanwhile, telcos are under pressure from investors to scale back capex even though they face “exponential traffic growth.”
But the crux of the issue is that just five large “traffic generators” account for 55% of daily traffic on telco networks, said Heydemann, noting that this costs telcos €15 billion each year.
She called on regulators and policymakers to balance this “unsustainable situation.”
A non-binary issue
Heydemann was followed on stage by Thierry Breton, Commissioner for the Internal Market, who is clearly ready to take up the challenge, having just launched a public consultation into whether telecoms regulation fit for purpose. He acknowledged that the telecom industry faced a “defining moment” and that the situation is not “business as usual.”
“The whole telco industry will need to go through a radical shift and revisit its business model… industry will have to adapt to survive, or putting it more positively, adapt to succeed,” said Breton.
The industry needs to keep up with the times and “so does regulation,” he said.
However, he took issue with the characterisation of the fair share debate as a “battle” between big tech and big telco, as if it is a “binary choice” of siding with one side or another. That’s not how he sees it and there is more to it than that.
“We will need to find a financing model for the huge investment fairly distributed that respects and preserves … freedom of choice for users… net neutrality… and freedom to offer services on a fair, competitive, level playing field,” he said.
But for Breton, there is much more at stake. “The real challenge is to make sure that by 2030 our fellow citizens and businesses … have access to fast, reliable and data intensive connectivity. And for that, we need the connectivity networks of the future.”