With its title, “Much more than a market: Empowering the Single Market to deliver a sustainable future and prosperity for all EU citizens,” the report is far more than a dry assessment of the current state of affairs and can be understood as a roadmap for the EU. To write the nearly 150-page report on behalf of the European Council, Letta traveled to some 65 European cities and conducted over 400 interviews before presenting his analysis at the EU special summit in April 2024. Letta described the single market as the “jewel in the crown” of European integration, one that is no longer keeping pace with a more conflict-ridden and digital world.
Specifically, the problem lies in three sectors that remain excluded from genuine integration and are largely organized at the national level: finance, energy, and telecommunications. According to Letta, it is precisely this fragmentation that acts as a “major brake” on growth and innovation. The report particularly highlights the approximately 300 billion euros in savings held by European families that flow out year after year—including into the U.S. economy—because European capital markets are fragmented.
In response, Letta proposes, among other things, a “fifth freedom.” In addition to the free movement of goods, services, people, and capital, the free movement of research, innovation, knowledge, and education should play a greater role. The goal of such an initiative is not only to increase global competitiveness but also to reduce market fragmentation. Another principle that runs like a common thread through the report is the principle that “scale matters.” Since economies of scale are crucial, Letta argues that European companies must reach a threshold of critical mass in order to continue to hold their own in global competition with the U.S. and China.
Why Telecommunications never became fully European
In no other sector described by Letta is the scale issue as evident as in the chapter on telecommunications. The figures cited in the report speak for themselves: There are currently more than 100 network operatorsin Europe, while in the U.S. a handful dominate the market. While the average European provider serves around 5 million customers, according to the report, the figure in the U.S. is about 107 million, and in China, as many as 467 million per operator.
The consequence of such a fragmented market is a structural investment disadvantage. Where revenue per customer is lower and markets are smaller, there is insufficient capital for the expansion of modern networks. Letta’s criticism is therefore directed at regulation that, for decades, was primarily geared toward market entry and price competition. In a market with over a hundred operators, the argument goes, an approach focused exclusively on market entry hinders the technological leap toward high-performance networks, which requires massive investments.
What has happened since April 2024
Letta’s report was not an isolated voice in the European competition debate. Just a few months later, in September 2024, Mario Draghi presented his report on European competitiveness and estimated the additional investment needed at 750 to 800 billion euros per year. With his recommendations, Draghi explicitly supported Letta’s assessment and pointed, among other things, to an excessive regulatory landscape in the digital sector.
A few months later, the European Commission translated these ideas into concrete programs. The Competitiveness Compass followed in January 2025, and the new Single Market Strategy was released as early as May 2025. At the same time, the debate over the resilience of critical infrastructure took center stage. Following several incidents of damage to Baltic Sea cables, the Commission presented a Cable Security Toolbox in February 2026, along with additional funding for repair and protection capabilities. In Germany, too, key responsibilities shifted with the creation in May 2025 of the Federal Ministry for Digital Affairs and State Modernization under Karsten Wildberger.
The Digital Networks Act as a Solution?
Even though two years have passed since the report’s publication, its impact remains significant. It has even been given its own name: On January 21st, 2026, the Commission unveiled the Digital Networks Act. The draft consolidates several existing sets of regulations into a directly applicable regulation and aims to eliminate the patchwork of national rules. Key elements include a “Single Passport,” under which operators would in the future need to register in only one member state, as well as EU-wide harmonization of frequencies and satellite services. In short, it is an attempt to translate Letta’s telecommunications diagnosis into binding law.
The fact that this sector, of all things, is the focus of such attention also has a security policy dimension. Letta himself summed it up succinctly in December 2025: Without a truly European telecommunications market, a credible European defense is inconceivable. Indeed, the fragmented telecommunications market in Europe concretely limits the region’s ability to provide resilient, secure, and interoperable networks.
Nevertheless, the DNA is not without controversy. The Federation of German Consumer Organizations, for example, warns against “backdoor” network fees and once again sees net neutrality as being at risk. A new dispute resolution mechanism would also be “highly problematic” from a consumer perspective. The digital industry association Bitkom, on the other hand, welcomes the general direction but finds that sufficient investment incentives are lacking. And the fact that the politically sensitive “fair share” issue—that is, potential contributions by large platforms to network costs—has been left out for the time being is likely to prolong the debate rather than end it.
From the perspective of telecommunications network operators, the DNA represents significant progress with its spectrum reform but has so far failed to achieve its goal of sustainably strengthening investment, competitiveness, and innovation in Europe. They are calling for the DNA to be much more strongly focused on investment incentives, regulatory simplification, market-oriented infrastructure migration, and a fairer digital value creation framework.
Much More Than Digital Infrastructure
Two years after the Letta Report, the question remains whether the analysis can be translated into policy—and whether that policy is the right one. The debate is unfolding on multiple fronts simultaneously. The Digital Networks Act will go through the legislative process in Parliament and the Council in 2026 and 2027. At the same time, however, external pressure is also mounting: transatlantic tensionsover Europe’s digital rules, acts of sabotage against undersea cables, and the issue of critical network security are bringing the report’s themes—competitiveness, digital sovereignty, and resilience—to the forefront of current political discourse.
This is therefore about “much more than digital infrastructure,” because these networks determine Europe’s innovative strength, technological independence, and ability to hold its own between the U.S. and China.
Professor Enrico Letta (President of the Jacques Delors Institute, former Prime Minister of Italy), Santiago Argelich Hesse (CEO of Telefónica Deutschland) and Dr. Stormy-Annika Mildner (Executive Director of the Aspen Institute Germany) will discuss this topic at BASECAMP in Berlin on September 17th.
