Budapest, 4 December 2013

 

Dear colleagues, ladies and gentlemen,

 

When in the beginning of the year we planned for a workshop on investment in European telecoms' sector we were acutely aware of the relevance and importance of the topic. In fact, creating an investment friendly environment is a major part of our existence as regulators.

 

How to achieve this goal will be the subject matter of our today's conference, which is perfectly organized by our Hungarian colleagues in the beautiful city of Budapest.

 

I am therefore glad that we, regulators will have the opportunity to exchange views with representatives from the industry, from financial and investment institutions as well as from the market research and advisory sector.

 

This brain-set can shed new light into our common pursuit of a vibrant European ICT industry. As Benjamin Franklin used to say "an investment in knowledge pays the best interest."

 

Trends of the emerging digital ecosystem

 

The political Agenda widely recognizes that a smoothly functioning digital market would serve as a positive beacon for the development of the European economy as a whole.

 

The emerging digital ecosystem turns the globe into a large interconnected neighborhood, characterized by user mobility, universal broadband coverage and ubiquitous communications. Smart devices using sensors enable new forms of communication with the user, with the environment and with other machines. Smart applications open new possibilities in education, healthcare, entertainment, communication and radically transform all aspects of our social and professional life.

 

However, in order for all these innovative applications using digital data to constantly and seamlessly reach each one of us, a robust network infrastructure is required all over Europe. High-speed broadband networks, fixed (FTTC, FTTH...) and mobile (4G, LTE), providing adequate capacity to carry big volumes of data, should be made available everywhere for everyone at affordable prices.

 

In this dynamic environment, if we actually want Europe to play an active role in future developments, major investments are needed for NGA network deployment, along with appropriate regulatory policies and measurable objectives, as those set by the Digital Agenda 2020.

 

As BEREC has pointed out in a number of occasions, Europe must continue to move forward and not fall behind. Europe must reform in order to adapt to changing times, ensuring the optimal conditions for its economy and ultimately for the prosperity of its citizens.

 

Indeed, the rising new era generates disruptive and transformative changes in market, economy and society. New professions are created, new business models emerge, new standards of social behavior are set and new regulatory paradigms are required.

 

Redefining the rules of the game

 

To ensure a smooth transition to the new era, it is necessary to properly redefine the rules of the game for government, industry, investors, businesses and citizens. This task ultimately remains with policy makers and regulators who are constantly invited to implement high level political decisions into concrete market rules effectively balancing conflicting interests and been capable to attract investment while safeguarding competition.

 

In Europe, we need to ask ourselves what concrete actions are necessary, in order to turn the European ICT industry into a rising star again.

 

It is an undisputable fact that the performance of the electronic communications' sector heavily relies not only on regulation. It also relies on a number of important other factors, including, inter alia, administrative and commercial law frameworks, tax regimes, network dynamics, attractiveness compared to other sectors and access to capital, which is particularly relevant in the present economic conditions.

 

From our perspective, one particularly relevant question is to explore the changes necessary to our regulatory framework. Our existing sophisticated framework has without doubt produced so far innovation, competition and affordable consumer prices, but it also needs to adapt to a rapidly evolving environment.

 

BEREC as a tool for regulatory consistency and harmonization

 

In this direction, we do believe that role of the Body of European Regulators for Electronic Communications (BEREC) is pivotal towards providing high level expertise, ensuring better coordination between stakeholders and harmonized implementation of European rules across national markets. As an independent body deriving from a novel institutional design, BEREC has indeed proven a powerful tool for consistency and greater harmonization in Europe (e.g. through the article 7/7a procedures).

 

BEREC faces the regulatory challenges arising in the new digital ecosystem by providing expert advice on new policies related to investment, to the creation of a digital single market, to the transition from ex-ante regulation to competition law via non discrimination mechanisms and adequate costing methodologies. Our experts also keep on analyzing issues such as net neutrality, consumer protection, accessibility to the information society for disabled users, machine-to-machine communications and so on.

 

Our view is that policy makers have to apprehend the complementary role of the various regulatory jurisdictions for a holistic response to the challenges ahead. For instance, the impact of legitimate expectations of ministers of finance from high usage fees deriving from spectrum auctions has to be assessed against the financial stability, the overall investment capability of mobile operators, which will in turn reflect on the retail consumer prices of new services.

 

Synergies between various regulatory bodies

 

In a broader perspective, we have to explore synergies between various regulatory bodies. For instance, the cooperation of regulators for electronic communications with competition authorities as well as with institutions dealing with privacy and security, will contribute to the effective regulation of the new digital ecosystem. Coordination will reduce conflicts or overlaps between various competencies. Facilitating “one stop shop” procedures and infrastructure sharing schemes for both fixed and mobile network operators and market players operating Europe wide and globally is a key factor to reduce network roll-out and service delivery costs.

 

To reignite interest in the European digital industry and promote an investment friendly environment, real commitment is needed from policy makers, regulators and the industry players. In other words, we need not only talk the talk but to also walk the walk.

 

We maintain that the challenge for the legal and regulatory environment is to provide stability, predictability and long term perspective for the investors, while it also needs to be flexible, sense the pulse of the market and constantly adapt to the changing circumstances of our industry.

 

Our vision should comprise the adoption of a human-friendly technology, which will become a useful tool for the citizen, enabling him to grow, to get educated, work creatively and progress.

 

I look forward to a lively and productive discussion that will weapon our brain with the silver bullets to foster investments in the European ICT industry.

 

Thank you all for your attention and your contribution to the success of this event.

European Telecom – A trendy investment target again?

NMHH Conference on investment in the telecom sector