The CEOs of Deutsche Telekom and Orange said Europe must cut regulation to give the industry any chance of meeting the digitalisation and 5G goals being pushed forward by the European Commission (EC).

Speaking at an event hosted by ETNO and Financial Times on the state of the industry, Deutsche Telekom CEO Tim Hottges (pictured) warned without a “new deal” the continent’s operators would be unable to stop a decline experienced over the last 20 years and will “not have the muscles to make the investments [the EC] is talking about.”

In support, Orange CEO Stephane Richard said European regulation is limiting the outlook for operators in the region compared with those in the US.

“There is a very basic difference between the US and Europe. In Europe, the regulatory framework is meant to promote investment, in the US the framework is to promote profitable investment – that’s it.”

“It is a political difference very heavy in consequences,” he said.

Hottges and Richard’s comments followed a presentation by Mariya Gabriel, EC commissioner for the Digital Economy and Society, praising the work already completed towards the digital single market and highlighting the need for further investment to keep pace with international rivals.

“The rest of the world is moving faster. Some countries are willing to take the lead and will not wait for us, as illustrated in 5G trials taking place in US and also in Australia and Asia. We risk lagging behind,” she said.

Gabriel added the EC’s priority was: “to invert the investment trend that has characterised Europe for too many years and catch-up with today’s leading countries”. The commissioner estimated €500 billion investment in high capacity networks would be needed.

Daily losses
In response, Hottges quoted recent ETNO figures stating the European telecoms industry loses €100 million per day to digital “disruptors” in the US and Asia.

“The regulatory environment has been a disadvantage for European companies and investors are voting with their feet,” he said, pointing to differences in attitudes to the operator’s T-Mobile business in the US and its European brands.

“In the US, our customers love our streaming service Binge On, and customers in Germany love our streaming StreamOn. So why then, is this [German] service under investigation from the regulators? Same game, same rules.”

The CEO also questioned why data collected by mobile apps is “less regulated than our data collected by mobile base stations?”

Hottges added proposed new rules currently going through the European authorities, including privacy and spectrum reform, risk “punishing, not rewarding” investment.

Coverage issues
Richard highlighted issues with rules around universal coverage, questioning whether operators should be able to focus efforts on economically viable projects.

“Is it a good use of public or private money to have antennas in areas where you only have cows, sheep and a few tourists, but not a real economic demand,” he said, adding: “Is it a good use of money to have satellites cover the oceans so we could have the internet of fishes?”

“At one point of time, we need to see what is the economic reality [based on] what is the real need of humans and not mountains or forest, and see where we should concentrate our investments.”