Reforming Europe's Telecoms Regulation to Enable the Digital Single Market

The study, Reforming Europe's Telecoms Regulation to Enable the Digital Single Market, details how a reformed regulatory framework can both safeguard competition as well as incentivize the investments in advanced next-generation access networks (NGA) required for the EU to reach its Digital Agenda targets and for the European Digital Single Market to become a reality.

While it has long been a leader in innovation and the technologies that comprise the backbone of the digital economy, Europe has fallen behind in ultrafast mobile and fixed Internet connectivity. Many markets in Asia and North America enjoy fibre access penetration that is up to 20 times higher and penetration of LTE that is as much as 35 times greater. The BCG study projects that by 2020 the shortfall in investment needed to meet EU Digital Agenda targets for broadband coverage and penetration could aggregate between €110 billion and €170 billion. The result for European consumers and businesses is slower, less reliable connections, leading to less value for consumers and lower economic growth.

The study proposes five measures that will reverse the regulatory root causes of lagging telecommunications investment and help to unlock the funding required to build the ultra-fast connectivity that is increasingly the lifeblood of the digital economy:

1. Substantial deregulation of fixed-line wholesale access
2. A level playing field for network operators and digital services providers
3. Spectrum policy that accelerates the build-out of mobile networks
4. Permitting healthy consolidation in mobile
5. Harmonizing rules and procedures to unlock cross-country synergies

Taken together, BCG estimates that these five measures would increase telecom operator cash flows by a cumulative total of €105 billion to €165 billion by 2020 and asserts that a significant portion of these funds would be available for additional investment in next-generation networks. Along with the rollout cost savings that DG Connect initiatives, such as the pending "less digging = more broadband" regulation, are expected to deliver, this program would significantly close Europe’s next-generation network investment gap, fuel growth and add jobs, and bring the goal of a vibrant Digital Single Market much closer to reality.