European authorities have long been concerned about the competitiveness of our companies, or rather the lack of it. The most recent example is the announcement of a study commissioned by President Von der Leyen to Mario Draghi on the subject.
All such interest is welcome from the perspective of an operator whose business is to provide Europeans with the best possible connectivity. Not surprisingly, the most productive and innovative companies are those that have been able to harness the potential of good connectivity to digitise their production processes and the goods and services they design and sell. Our political leaders agree with this diagnosis and view connectivity as the foundation upon which to build Europe’s digital future.
The key role of public telecommunications networks
It is hard to imagine a scenario in which the infrastructure investment necessary to boost competitiveness in Europe is made without the involvement of the operators that manage terrestrial public telecommunications networks, understood as those that are available to the general public.
There is no doubt that there is a market niche for private networks that provide high performance local connectivity to a factory or a port, and for new satellite networks to provide basic coverage to remote locations. However, fixed and mobile public networks will remain essential to ensure that all European businesses, including small and medium-sized ones, can develop competitive products and that all citizens, wherever they are, can enjoy them.
Spectrum policy must take its share of responsibility
This latest observation is important for spectrum policy, which must take its share of responsibility for creating a regulatory environment that fosters investment and enables Europe to meet its ambitious connectivity and digitisation goals, and to do so in an inclusive and sustainable way.
According to a recent study by Aetha consulting for Ericsson ,the annualised expenditure of mobile operators in spectrum licences is between 35% and 40% of their total investment, including auction spending, annual fees and commitments made in exchange for licences.
At the same time, having more frequencies is the easiest and most efficient way to expand network capacity and improve connectivity. In fact, the lack of additional frequencies often means that network capacity cannot be expanded due to operational impossibility or lack of return on investment.
Spectrum licences, therefore, represent a very significant cost and a major source of efficiency in deployment, placing spectrum managers in a decisive position. With appropriate spectrum policies, there would be more resources to invest, and each euro invested would have a much greater impact on the quality of connectivity. All of this would undoubtedly enhance the potential for increasing the competitiveness of European businesses and citizens.
An opportunity to create positive expectations
There are two important milestones coming up that are a great opportunity for spectrum regulators to send a clear signal to investors. On the one hand, the European Commission will propose in the coming months a new Radio Spectrum Policy Programme, or RSPP, setting out the priorities and strategic lines of spectrum policy in the European Union for the coming years.
On the other hand, the World Radiocommunications Conference will be held in Dubai in November/December, an event that will have a major influence on the availability of new bands for cellular networks in Europe in the next decade.
In future posts we will examine each of these in detail and how they could be used to boost connectivity and generate a positive, relevant and lasting impact on all those who rely on telecommunications networks to grow their business or personal lives.