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

Posted by Social Science Research Network

Reforming Europe’s Telecoms Regulation to Enable the Digital Single Market -Wolfgang D. Bock, Maikel Wilms, Peter Soos and Bjoern Roeber (all Boston Consulting Group – Berlin)

ABSTRACT: In a few short years, Europe has gone from leader to laggard in advanced digital networks. Many markets in Asia and North America now enjoy fiber access penetration up to 20 times higher and LTE penetration up to 35 times higher than in the EU. As a result, European consumers and businesses experience slower connections, leading to less value and slower economic growth. This report examines the regulatory reasons why Europe is falling behind, and it offers a strategy and roadmap for reversing the current negative trends. The three main inhibitors of investments identified by the report are, (a) the inability of telecom operators to make a fair return, (b) the mandated inefficiencies in the mobile sector, (c) the lack of a harmonized pan-European approach. To counteract this scenario, The Boston Consulting Group (BCG) has developed a strategy to redress the situation and suggests the following five measures to unlock EU telecoms’ growth potential: (1) substantially deregulating fixed-line wholesale access, (2) creating a level playing field for network operators and OTT digital service providers, (3) modernizing spectrum policy across Europe to create a sustainable infrastructure competition that incentivizes network investments, (4) permitting healthy consolidation in mobile, (5) harmonizing rules and procedures to unlock synergies between countries.