Neelie Kroes calls for greater European investment in fibre

03 October 2011 | Kavit Majithia

Neelie Kroes, the EU telecoms commissioner, has outlined her commitment to ensuring larger telecoms operators in Europe make the necessary investments in replacing old copper infrastructure.

While noting that copper infrastructure is clearly a viable business option for operators, she believes it may be this revenue profit that is reducing the amount of investment made in next-generation fibre. Kroes told the Financial Times she was “interested to explore a new pricing model” to make the transition and declared a plan to impose increasing regulations on incumbents that own copper networks, like France Telecom and Telefonica to ensure necessary investment is made.

According to the FT, there is also an apparent reluctance among private investors and banks to make the estimated €270 billion investment in Europe, which Kroes estimates is required to catch up with highly developed infrastructure in parts of Asia and the US.

Kroes believes many telecoms operators are showing a reluctance to upgrade to fibre because they are presently making money from leasing out copper to smaller telcos by charging access fees. The EU telecoms commissioner will reportedly tell chief executives at Deutsche Telekom and France Telecom today, to begin investing in modernising Europe’s broadband infrastructure and not worry about the benefits this will have to their own companies.

A new pricing structure on copper could see the revenues from access fees reduced by the EU, unless operators make a commitment to fibre infrastructure which could make them exempt from such provisions.

Kroes’ latest plans are part of a wider push by the EU to ensure 500 million Europeans have basic broadband access by 2013, with at least 30Mbps connections by 2020.