European Commission makes first move towards increasing spectrum licence periods

The European Commission came under criticism at MWC this week for ‘overly consumer-friendly policies’ cutting their revenues.

European Commission

The European Commission came under criticism at Mobile World Congress (MWC) this week for what the CEOs of Vodafone and Orange called ‘overly consumer-friendly policies’. 

In a private meeting at the event both CEOs of Vodafone and Orange renewed their frequent calls to regulators to come to their aid and help them boost investment after years of regulatory policies which they, frankly, see as actions which have downgraded their ability to maximise income from the market.

The London Daily Mail quoted a source present at the meeting as saying that while commissioner Andrus Ansip said he supported compromise, he was open to extending the length of airwave spectrum licences in Europe to 25 years from the current 10-15 years.

The operators feel that they are being over-regulated by the relatively short spectrum licence periods they are forced to accept in Europe. Whereas in the US operators are given long licences – and in some case are allowed almost indefinite licence duration – the EU’s ten 10 to 15-year rental periods do not allow them time to innovate.

They also maintain that they are subject to a confusing patchwork of differing national rules and left in a situation where they are investing vast sums of money in next-generation networks with little certainty as to how long they will have access to the spectra.

Telco leaders in the meeting called for a policy of 35-year or indefinite licence duration, as in the United States, the insider said.

"But that's a good step forward," the source said, referring to the 25-year licensing proposal.

The regulator’s attitude to mergers was also under attack. Speaking on a panel at MWC Stephane Richard, CEO, Orange said: “Obviously, it is easier for a company to get some return out of huge investments that we have to make in the networks when we have credible size. It's so obvious."

However the EU regulator, and many EU countries, do not agree with this attitude and are keen to remind them that competition should continue to be the main driver of investment. In many cases internationally the regulators are not keen to let the number of telecoms companies supplying to consumers to reach less than four since a dip to two suppliers, for example, has the dangers not just of monopolisation, but of price-fixing.

Another target for the operators at MWC was the abolition of roaming charges which while being popular with the public, will, the telcos say, reduce their revenues yet further with no obvious avenues open to them to replace lost income.

European Commissioner Ansip’s attitude to this argument at MWC was to say that he was open to allowing cross-border mergers but, “…consolidation within national markets was more tricky.”

Giving a speech at MWC Ansip also had words of warning for carriers and operators on the rollout of 5G: “When 4G came along, Europe was slow to push ahead. We do not want to make the same mistake with 5G. That is why we have set a clear timetable to keep the EU ahead of the race. We aim for fast movers to start 5G trials in selected areas in 2018, then coordinated commercial deployment of advanced 5G networks from 2020.”