The CEO of Orange said that European operators considered that the huge investments in network infrastructure was being hard to monetize
MWC, BARCELONA: European telcos face intense pressure on two fronts, said Christel Heydemann, chief executive of French group Orange at MWC – to support high volumes of traffic, mostly from large digital players, and to also support consumer expectations to keep prices low.
Heydemann cited a study by PwC claiming 46 percent of telco CEOs think their companies won’t last another decade because massive investments in network infrastructure are too hard to monetize.
“Over the last 10 years the situation… has become completely paradoxical. From fierce competition to sometimes outdated regulations, our sector is dealing with contradictory requirements,” she said.
“Consumers always expect to pay less and get more. In the meantime telcos are facing pressure to squeeze capex while coping with exponential traffic growth, mainly concentrated from a handful of digital players.”
European operators are computing with a difficult equation between investment and regulation, said Heydemann, suggesting the pressure to provide increased network capacity and meet stretching connectivity targets set by the European Union.
“Europe needs a bigger push to hit these targets and the push needs to be applied to the whole digital ecosystem, not just telecoms operators. It is time to recognize the telecommunications industry has been one of the biggest contributors to our economies through massive investments,” she said.
Heydemann said the five largest generators of data account for 55 percent of daily traffic in mobile networks – which represents €15 billion ($15.95 billion) of costs to the telco set. They invest €56 billion per year in infrastructure, she said.
She referred to a public consultation opened by the European Commission on whether ‘big tech’ firms might contribute towards the network infrastructure investments. Orange welcomes the initiative, she said. “We are not asking to change the principles of net neutrality in Europe or a new tax mechanism.”
Heydemann suggested there should be a fair and direct contribution to the costs of the network deployment.
Seperately, she highlighted progress with open RAN, noting telecoms companies will benefit from advantages of sharing – mainly in terms of reduction of costs and energy consumption, while also adapting their own software to the needs of customers.
Meanwhile, at the same event, Deutsche Telekom CEO Timotheus Hoettges noted that European telcos invested €55 billion in infrastructure last year compared with €1 billion in connectivity investments from hyperscalers.
Hoettges said in a keynote: “Is it a fair deal that hyperscalers and streamers are using our infrastructure for free? Shouldn’t there be a fair sharing between, let’s say this money which we are investing into the infrastructure and the one we are monetizing?”.
