EU Proposing Telecoms Overhaul To Encourage Investment

The European Commission is planning to reform the European mobile telecom rules by proposing spectrum licenses are issued for at least 25 years. This, it hopes, will provide more stability for operators in the European Union. The proposal is due to be published in September and is expected to be endorsed in 2018, but it needs to be approved by the member states and European Parliament. This means that the draft proposals may be amended between now and becoming the law. The European Commission's plans also mean it will have the ability to control certain aspects of the bidding and assignment process, including spectrum allocation deadlines and spectrum sharing in addition to the minimum 25 year licence rule. Other plans in the draft regulation including allowing member states to award multi-country or pan-European Union licences, but currently this is seen as a voluntary arrangement.

Current European Union telecom and spectrum rules are left up to the individual member states. Different states, or counties, apply slightly different rules to their auctions and as this spectrum is potentially very valuable - spectrum auctions can raise billions of Euros, representing something of a windfall for the host country - governments are unwilling to relinquish control of how this spectrum is divvied up, as this could result in lower revenue. However, Europe's carriers have called for a greater level of coordination of spectrum policy across the European Union. Current legislation means that spectrum contracts are subject to different durations, whereby an operator may have a shorter or longer licence depending on the member state. This in turns makes it difficult for an operator to form a cohesive strategy and bring a network to several countries, which they are otherwise being encouraged to do thanks to a reduction on EU-wide roaming charges.

There are a number of benefits of the proposals, including how it will provide network operators with a medium to long term business asset. This will increase the stability of the market and should encourage greater investment, because the longer the licence runs the greater the potential to generate profits. This in turn should encourage more operators to take an interest in the European Union's mobile sector, seeking to take advantage of the world's largest single market. With fifth generation, or 5G, networking technology only a relatively small number of months away this could be a very important step. The European Union sees 5G networking technology as a cornerstone in tomorrow's cities, involving smart devices such as driverless cars, remote healthcare systems and the Internet of Things. Another proposal is that national regulators would be used to review their peers when it comes to spectrum allocation and similar. This change is designed to harmonize how the European Union regulators interpret and implement the rules of spectrum assignment, which again is seen as a positive thing from the carrier's perspective. From a customer perspective, these changes should be broadly positive. Changes in EU roaming costs are making it increasingly affordable to use a mobile device across many member states without incurring bill shock. The prospect for a pan-European carrier could be good news although the competition authorities will need to keep a careful eye on this development.

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About the Author

David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.