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though consumers benefit from much
improved services,” IDATE says. “In
other regions consumers maintain or
even increase their expenditure on
mobile network services, in relation to
their overall consumption.”
The consequence is that European
mobile network operators’ investment
in
infrastructure-to
update
their networks and deploy new
technologies—has been almost flat
even as such capital expenditures
per capita grew sharply in the United
States, Japan and South Korea.
“This reflects the fact that MNOs
are large corporations who cannot
commit to investments that are not
correlated to increasing revenues. In
other words, MNOs worldwide are
subject to the same constraints set
by investors,” IDATE says. “EU MNOs
are investing as much as they can,
but their declining revenues simply
prevent them from keeping up in the
innovation and investment race with
other regions.”
But Europe’s wireless future is
brighter than it seems: The cause of
the present situation is known and
can be fixed. The root of the problem
lies in the EU telecommunication
market regulatory framework that
was adopted in the early 2000’s.
“The relative decline of revenue in
recent years for [European] Mobile
Network Operators (MNOs) appears
to be due to policy decisions aimed
at maximizing short-term consumer
benefits at the expense of long-term
investment incentives,” IDATE says.
“The data suggest this strategy is
backfiring. The lower revenues in
Europe have deterred MNOs from
investing, which in turn delays the roll-
out of networks and the adoption of
services by consumers. Consequently,
the unit costs of some services to
consumers are higher than in other
regions.”
But that framework is currently under
review as EU officials stake out an
ambitious effort to make Europe a
technological leader. And the findings
of the IDATE study suggest the effort
would pay off.
“Investment in mobile communication
infrastructure
creates
local
employment
and
significantly
contributes to growth, as an enabling
factor for the digitalization of other
industries,” IDATE says.
So with the EU making the DSM a top
priority and politicians acknowledging
the importance of investment and
top-class connectivity there is hope
the new regulatory framework will
address these issues. IDATE expresses
optimism that Europe can find ways
to “put investment at the heart” of its
regulatory strategy.
“The Digital Single Market initiative
is an opportunity to adopt a pro-
investment
and
pro-innovation
mobile
regulatory
framework,
enabling Europe to lead in mobile
communication through its attractive
market size, growth potential and
technology expertise,” IDATE says.
“The findings and data of this study
suggest consumers, businesses and
individual European economies will
benefit from policy makers’ adoption
of a balanced regulatory framework
that encourages investment in mobile
infrastructure and technologies.”
Wassim Chourbaji is vice president
and head of Qualcomm Government
Affairs for Europe, the EU and MENA.
59 l New-Tech Magazine Europe