Brussels, 1st of October 2024 – MVNO Europe calls on the future College of Commissioners to consider Mr. Draghi’s recent recommendations with due caution as they undermine the crucial role competition can play in fostering innovation, investments, and the interests of both consumers and businesses.
MVNO Europe is deeply concerned by Mr. Draghi’s recommendations for the telecom sector[1], in particular its focus on consolidation of the industry in the hands of a few large operators, and proposals to modify spectrum policy and competition policy to artificially drive such consolidation. We regret to see that the telecom chapter of the Draghi’s report blatantly ignores the value of competition as a driver for investments and innovation, unlike other chapters of the same study. These recommendations, if implemented, may damage the telecom market rather than stimulating it. Ultimately, they would affect competition as well as citizens’ and businesses’ interests as users of telecom services, and thus overall welfare in Europe.
MVNO Europe regrets the report’s misleading association between the number of operators, including MVNOs, the European telecom sector’s alleged low profitability, and its alleged underperformance. The report’s call for change to EU policy and regulation to artificially favour the largest operators echoes the narrative advanced by ETNO (now Connect Europe). It overlooks the critical role that competition and a variety of operators play in driving innovation and choice for both consumers and business users. The suggestion that Europe has “too many” operators compared to the US and China ignores the value and welfare that competition brings to the market and misrepresents the impact of policies, legislation and regulation designed to foster it.
Contrary to the report’s suggestion that Europe is lagging behind, many EU Member States in fact are leaders in both 5G and fibre deployment in international comparisons, and at the same time in offering choice, innovation and value for money to users (consumers, businesses and administrations). The report includes inconsistencies as it underlines the need to help SMEs to thrive with less regulatory burden, but, when it comes to the telecom sector, makes suggestions to further consolidate the position of incumbents to the detriment of market challengers. Innovation thrives in competitive environments, not in markets characterised by dominant market positions or by tight oligopolies.
MVNO Europe opposes the Draghi report’s spectrum-related proposals which would disproportionately benefit the largest operators and restrict challenger operators’ ability to compete, thereby reducing opportunities for innovation.
In parallel, MVNO Europe would like to highlight hat MVNOs do contribute significantly to financing infrastructure by paying substantial wholesale fees to Mobile Network Operators (MNOs) for network access (MVNOs pay MNOs for each minute/sms/megabyte used). This aligns with Commissioner-designate Virkkunen’s mission to incentivize investments in digital infrastructure, demonstrating that MVNOs play an active role in sustaining Europe’s telecom infrastructure and should not be disregarded.
MVNO Europe looks forward to working with the European Commission, Parliament, Council, BEREC and all relevant stakeholders, to ensure that the EU continues to put citizens’ interests and the needs of European business users at the heart of telecommunications policy, rather than serving the narrow business interests of the largest telecom companies. We call on the new European Commission and the newly elected Parliament not to envisage legislation that disregards the importance of competition and the role of MVNOs in driving users’ interests, innovation, and investment in Europe’s telecom sector.
MVNO Europe’s position on key related policy topics is available in our response to the European Commission’s consultation on its White Paper entitled ‘How to master Europe’s digital infrastructure needs?’: https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14168-White-Paper-How-to-master-Europes-digital-infrastructure-needs?/F3470771_en
[1] Section 3.1, in-depth Report: https://commission.europa.eu/topics/strengthening-european-competitiveness/eu-competitiveness-looking-ahead_en#paragraph_47059