The telecommunications sector needs substantial investment and regulatory reforms to meet the European Union’s digital and sustainability targets. Nicolas Guérin, President of the French Telecoms Federation (FFTélécoms), sat down to discuss challenges and strategic goals with Euractiv’s Xhoi Zajmi.
Guérin advocates for a simpler, investment-friendly regulatory environment that fosters competitiveness, sustainability, and digital leadership for Europe’s telecom sector.
XZ: Given the estimated need for an additional €200 billion in investments by 2030, what measures does FFTélécoms propose to secure operators’ ability to invest in digital infrastructure?
NG: First of all, it’s crucial to highlight that many of the Commission’s findings, echoed by recent reports such as the Letta report on the Single Market and Draghi report on European competitiveness, are very much in line with long-standing concerns expressed by operators about the challenges faced by the sector.
European electronic communications operators have an essential role to play in realising the ambitions of the European Union in terms of connectivity, digital leadership, economic and industrial competitiveness, but also social inclusion and ecological transition.
Telecommunication networks are needed for key innovations like artificial intelligence (AI), autonomous and connected mobility, smart industry or smart city to happen. It’s not just a sectoral issue; it’s fundamental to the EU economy as a whole.
Operators must sustain very high levels of investment to play this role, modernise networks, and meet the ambitious 2030 deployment targets set by the Digital Decade programme.
These investments are essential not only to handle surging traffic volumes but also to foster innovation and deliver advanced connectivity to all European citizens and businesses.
Bridging the nearly €200 billion investment gap requires more than small-scale sectoral adjustments.
The European Union must adopt an approach that breaks away from the current regulatory framework—one that better supports private investments in networks and rebalances the relationships between European operators and major global traffic generators.
It should aim for a regulatory environment that boosts the sector’s attractiveness and competitiveness by simplifying and harmonising existing regulations.
XZ: How can European regulatory frameworks be modified to encourage more investment and innovation within the telecommunications sector?
NG: The EU lacks a true single market for electronic communications, hindered by significant regulatory fragmentation among Member States and inconsistent rules across the value chain.
To create a regulatory environment that restores the sector’s attractiveness and competitiveness, we believe it is urgent to remove unnecessary regulations and further harmonise sector-specific and horizontal rules applicable to electronic communications.
A clear example of potential improvement is the spectrum policy. We believe that aligning the conditions for spectrum licence renewals with the best practices at the EU level – especially regarding licence durations–and promoting predictability in spectrum use and renewals is crucial to encouraging investment.
In that sense, we fully support the Draghi report’s proposal to at least double the length of licences. This doesn’t imply introducing a centralised European allocation or fully harmonising the timing of auctions, but rather ensuring that auction models in each Member State are aligned on best practices and are investment-oriented.
Another example is privacy. Outdated sectoral legislation applying only to operators, such as the ePrivacy Directive (2002), is now clearly inconsistent with horizontal law, such as the GDPR (2016), thus limiting our capacity to innovate compared to other players in the value chain processing the same type of data.
Overall, the sector is heavily regulated due to the history of liberalisation in the late ‘90s. This regulatory framework must be modernised to take into account current market realities.
XZ: What role do you see public-private partnerships playing in addressing the investment challenges outlined in the White Paper?
NG: Operators already invest significantly in their infrastructures, with nearly €114 billion spent in France alone over the past decade, excluding the cost of frequencies. Public authorities also have an important role to play, particularly in the coverage of the most rural areas.
In France, for instance, the state has set an ambitious target to achieve widespread fibre coverage by the end of 2025, relying on a combination of private and public investments.
However, we believe public intervention should be limited to areas where it is truly necessary to attract private investment and maximise privately funded deployments.
Progress can be made in this regard. For example, in France, sector-specific taxes amount to €1.5 billion each year, exceeding the corporate taxes paid by operators. If these taxes were reduced or at least redirected to fund network deployment, this would lessen the need for public intervention to achieve gigabit connectivity for all.
Although this falls under national jurisdiction, a benchmark from the Commission on the investment environment for network deployment across different Member States could be useful in identifying best practices.
XZ: What steps do you propose to address the regulatory and economic asymmetries between telecom operators and large content providers that account for over 50 per cent of traffic?
NG: FFTélécoms has been proactive in proposing solutions to address the significant asymmetries operators face within the value chain, both regulatory and in market power.
A few OTT players, who represent more than half of the bandwidth usage (53 per cent in France in 2023 for the five major players), currently benefit from a quasi “free riding statute” or “zero-cost economy” as they do not bear the costs associated with their network usage.
As a result, these asymmetries allow these entities to offload network investment costs onto operators while not limiting environmental costs or bearing them directly.
Furthermore, the relationship between telecom operators and those large content providers has fundamentally shifted in recent years. These major traffic generators hold considerable market power, enabling them to maintain unbalanced contractual terms.
To tackle this issue, the Commission’s White Paper, along with the Draghi report, proposes solutions we fully support. These include encouraging the definition of commercial contractual agreements for data traffic termination and infrastructure cost-sharing between telecom operators, who own the infrastructure, and large online platforms that utilise it.
In the event of failed negotiations within a reasonable timeframe, a proposed arbitration mechanism led by national competition authorities would step in.
We believe this approach is both proportionate and essential for fostering a fairer environment that promotes investment and sustainable growth for all stakeholders in the digital value chain.
This should apply only to a limited number of large traffic generators whose individual behaviour can have a direct effect on the investment requirements of telecom operators and, therefore, would not hinder the ability of businesses to scale their operations online.
XZ: How does FFTélécoms envision extending net neutrality principles to all relevant digital services to promote fairness along the connectivity value chain?
NG: FFTélécoms strongly supports maintaining an open internet, which is crucial for the EU’s competitiveness and essential for enabling small businesses to expand their online activities. As such, it is committed to upholding net neutrality rules that ensure the smooth functioning of the internet.
However, while the principle of non-discrimination of internet traffic today only applies to telecom operators, some digital players exploit this regulatory asymmetry to further deepen existing imbalances and maintain the status quo, with unbalanced contractual conditions for operators to terminate traffic.
This issue is closely tied to operators’ ability to establish commercial contractual agreements with large content providers.
A recent example of failed negotiations between a telecom operator and a major content provider in Germany illustrates how difficult it is for telcos to obtain fair compensation for network usage through commercial agreements.
Indeed, if an operator tries to negotiate better rates that truly reflect the capacity costs incurred by large content providers, they risk being caught between these players’ ability to reroute traffic elsewhere and the resulting degraded quality of service (QoS) for customers for which the operators will be blamed.
Such situations have been observed very recently in South Korea, where consumers have been impacted because of the redirection of traffic unilaterally imposed by some content providers. This must change.
Therefore, in addition to the establishment of a mandatory dispute resolution mechanism for commercial agreements, we strongly believe that the Commission should consider applying the key principles of net neutrality to all relevant players within the internet ecosystem to ensure greater fairness and the best quality of service for consumers.
XZ: How would you balance infrastructure investments with sustainability goals, particularly in light of the increasing demand for data-driven services?
NG: Infrastructure investment and sustainability goals are deeply interconnected. This is why we refer to the “twin transition” toward a digital and green Europe, in which telecom operators will play a crucial role.
Making the digital ecosystem a sustainable sector is a key priority for operators, who are continuously working to optimise their networks and are committed to avoiding, reducing, or offsetting all of their Scope 1 and 2 emissions by 2040.
Additionally, we believe that including connectivity networks in the EU’s green taxonomy would be a crucial step to direct more investment toward sustainable infrastructure.
However, for the twin transition to succeed, it is essential that all digital players take on a greater share of responsibility in the optimisation of network usage.
The very sustained growth in data traffic – multiplied by 20 between 2012 and 2022 in France – largely driven by a few digital giants, is holding back the transition to a more sustainable digital future.
Some of these players have adopted energy-intensive and environmentally unsound practices, such as launching videos by default or pre-loading advertisements. These practices, which are currently unregulated, fuel traffic growth, which in turn calls for investment in network densification and, consequently, accelerated renewal of equipment.
Technical solutions to optimise data consumption already exist – such as optimised codecs, adaptive bitrate streaming, etc. In France, Arcep and Arcom are promoting these practices through their general framework for the eco-design of digital services (RGDSN).
The Commission should draw inspiration from such initiatives to make the application of network usage optimisation practices and standards at the European level mandatory.
Sending an economic signal to the biggest traffic generators and improving consumer awareness about the environmental impact of the services they use would also be an effective way to reduce both the environmental and investment costs associated with network usage.
XZ: What is your perspective on achieving greater harmonisation of telecommunications regulations across the EU without compromising effective national regulatory frameworks?
NG: Despite the shared desire to complete the single market for electronic communications, it is imperative, especially for the strategic assets that are network infrastructures, to maintain effective and secure national regulatory frameworks, particularly regarding security requirements.
However, we believe there may be some room for the Commission to collaborate with Member States to identify areas where we can collectively build on best practices and work toward greater harmonisation without negatively impacting existing frameworks.
We are concerned that applying the country-of-origin principle–using the national framework of one operator’s home country–could have detrimental effects in many areas. Instead, we should aim for full harmonisation based on the best standards available.
This is particularly relevant for legal interception obligations, which pose a major hurdle for operators trying to enter new national markets. The lack of a harmonised framework at the European level creates regulatory asymmetries between telecom operators and OTT players. However, we must not compromise on security; pursuing further harmonisation is the way forward.
Consumer law is another area where we can pursue greater simplification through harmonisation and alignment with horizontal regulations while still ensuring a high level of protection for consumers.
XZ: In light of the challenges outlined in the White Paper but also Draghi’s report, what is your long-term vision for enhancing Europe’s connectivity landscape and ensuring its competitiveness on a global scale?
NG: Electronic communications networks form the essential foundation for the connectivity that citizens and businesses rely on daily. They act as crucial catalysts for all innovations that will drive growth and competitiveness for the EU on a global scale.
With a strong commitment from the Commission to foster a concerted effort across the entire value chain and to modernise the regulatory framework, moving away from the current situation toward one that is simpler and conducive to infrastructure investments, Europe can ensure the sustainability of the sector and meet the digital decade coverage objectives in the short term. This is essential to guarantee the competitiveness and strategic autonomy of the European economy and to provide all citizens with the connectivity they need.
The EU is home to strong global players in the telecom sector. European operators are not merely local players; they are crucial in maintaining the continent’s relevance in the global digital value chain.
Competitive telecom companies are essential to ensuring that Europe remains a leader in digital innovation and connectivity. While they are ready to meet this challenge, they need the upcoming Commission to make the right decisions.
We can summarise our vision for enhancing Europe’s connectivity landscape in a few simple words: level playing field, harmonisation, simplification and sustainability.
[Edited By Brian Maguire | Euractiv’s Advocacy Lab ]
