[EN] EVENT HIGHLIGHTS | The Digital Decade and the Telecom sector value creation

On the 28th of September, PubAffairs Bruxelles organised an afternoon session on the question of how the EU telecom industry can create long-term value in Europe with Mr Anthony Whelan, Member of the Cabinet of Commission President Von der Leyen, European Commission, Ms Eva Kaili MEP (S&D/GR), Committee on Industry, Research and Energy – ITRE, European Parliament, Mr Alberto Di Felice, Director for Infrastructure, Privacy and Security, DIGITALEUROPE, Dr Andrea Renda, Senior Research Fellow and Head of Global Governance, Regulation, Innovation and the Digital Economy, CEPS and Ms Nawar Cristini, Equity Analyst, Morgan Stanley.

Mr Ramon Fernandez, Delegate CEO, Finance, Performance and Development, Orange, gave an introductory speech.

The event was moderated by Matthew Newman, Chief Correspondent, MLex.


Matthew Newman introduced the issues at stake in the debate and the speakers before giving Ramon Fernandez the floor.

Ramon Fernandez began by pointing at the challenges ahead for the telecom sector in terms of implementing the objectives of the Digital Compass and reaching the targets of the Digital Decade. He then proceeded to explain that the Covid-19 crisis has highlighted the necessity to foster inclusive digitalisation and emphasised the role which the telecom sector has played in facilitating the capacities that have been necessary to cope with the tremendous increase of connectivity needs. However, he also drew attention to the discrepancy between the growing importance of telecom networks and services, on the one hand, and the difficulty of companies in the sector to create value for their shareholders, on the other hand.

Following up on this statement, the speaker referred to an ETNO report of March 2021, which indicated that 2,4 million jobs could be created in the EU over the next four years as a result of the digital transformation of the economy. Nevertheless, creating jobs on such a large scale is only possible if telecom companies invest 300 billion euros in network infrastructures, he added, while emphasising that this kind of capital expenditure (CapEx) is discouraging for potential investors if not value creative. In order to tackle this issue, the speaker proposed to develop an adequate framework that guarantees sufficient returns to both telecom companies and their respective investors, called a « New deal for EU Networks ». The speaker from Orange further emphasised that his company has invested 60 billion euros over the last ten years, 13 billion of which were used for the roll-out of fibre connectivity. He elaborated on these actions by describing that innovative projects for telecom companies are particularly resource-intense at the beginning, while time is needed to generate profits.

Mr Fernandez went further into detail by stating that revenues for telecom companies are restrained due to the high fragmentation and competition in the EU telecommunication markets, not least because of regulatory measures that impact the profitability and the investment capacity of telecoms. The speaker continued to explain that these circumstances led to an underperformance of the stocks of European telecom companies compared to their US counterparts over the last decade.This process, Mr Fernandez remarked, is clearly illustrated by the fact that there is only one telecom company on the Euro Stoxx 50 index, while ten years ago it still included four companies from the same sector.

The speaker moved on to highlight that the NextGenerationEU has created momentum to act on the aforementioned issues, as it represents what he defined as a « revolution in funding method » that will provide a crucial stimulus for the European economy. Furthermore, he emphasised that the discussion around the matter of digital sovereignty creates an unprecedented alignment of business, consumers and (geo)political interests in the aftermath of the Covid-19 crisis. On the same note, Mr Fernandez also warned against a trend whereby EU telecom providers are selling their infrastructure to maintain their businesses’ profitability, as this would lead the EU away from the objectives enshrined in the very idea of digital sovereignty.

Mr Fernandez subsequently stressed the importance of several focal points necessary to cope with the issues at stake in the digital transformation. As a first focal point, he highlighted the need for a European approach in the form of a long-term strategy, which now exists with the EU Industrial Strategy and the EU digital and green twin transition plans. Even though essential initiatives such as the 5G toolbox and the Digital Decade targets are pointing in the right direction, he emphasised that they lack an assessment of their impacts on telecommunication operators, especially in terms of financing and investments, as other EU competitors may have been doing. He further added that tools such as the Important Projects of Common European Interest (IPCEIs) are critical to reaching the EU digital goals, while he explained that Orange, in cooperation with other telecom companies and vendors, is engaging in the IPCEI on Next Generation Cloud Infrastructure and Services in order to deliver cloud solutions. Furthermore, Mr Fernandez stressed the need for a higher commitment at the EU level to support virtualisation, Open RAN and the IPCEI on microelectronics, as these domains have the potential to create a great degree of Europe-wide added value in the foreseeable future.

As a second focal point, the speaker urged the EU to adapt the common EU approach to better fit the ongoing changes in the digital sector. He elaborated on this statement by raising the issue of competition policy, which the speaker reckoned should not be a policy per se, but should rather counter the fragmentation of the EU market, notably Europe’s disadvantage vis-à-vis its major competitors. He also called for more legal certainty and clarity regarding the rules of RAN sharing. He subsequently went into detail regarding the importance of RAN sharing agreements to telecom companies in order to foster a more efficient and environmentally-friendly network deployment. Mr Fernandez called upon the European Commission to acknowledge the compatibility of RAN sharing agreements with competition rules, and to define clear criteria allowing telecom operators to perform their self-assessment in a more secured way.

As a third focal point, the speaker from Orange commended the efforts made by the EU policymakers in taking the global digital realm into account, with special regard to the role of large digital platforms. On the same question, he expressed the opinion that there is a need for action so as to balance the contributions to network costs, as this further step would allow for more investments, the greening of the digital sector and would prevent large tech companies from using high network capacities without bearing a fair share of the inherent costs.

On another note, the speaker called for better enforcement of existing rules and an improved harmonisation of the rules on the EU’s internal market. He exemplified his stance by referring to the European Electronic Communications Code that aims to foster investments in the area of the spectrum policy, which he considered to be lacking in adequate enforcement. The speaker also highlighted that this state of play stems largely from the different interpretations of Member States when implementing it at national level, particularly when it comes to both fixing reserve prices or conditions for potential new competitors on the market and license duration.

Mr Fernandez subsequently emphasised the telecommunication sector’s preparedness to address the challenges ahead and readiness to become a fundamental player in the digital and green transitions. He concluded his remarks by stressing that Orange remains committed to be a strong actor of the digital and green transitions and continues investing in R&D for the networks and services of tomorrow, as well as in cybersecurity, which he described as critical to accomplishing the EU’s digital sovereignty, artificial intelligence (AI), cloud services and digital inclusion as means to make the digitalisation of society safer, more efficient and increasingly environmentally friendly.

The moderator drew attention to the topic of global competition in the telecommunication sector and moved on by giving the floor to Mr Anthony Whelan.

Anthony Whelan started his remarks by commending the efforts of private actors from the telecommunication sector, such as Orange, in enabling the digitalisation of the EU economy. He further touched upon the role of telecom companies not only in terms of their traditional line of business, but also in terms of other parts of the value chain, such as cloud or finance-related services. This last factor, the speaker highlighted, sometimes makes the market undecided on the appropriate amount of revenues which should be generated, from a mix of infrastructure and service activities with different capital intensities and risk profiles. In light of these considerations, Mr Whelan remarked that the evolutions of both the telecom sector and digital markets have created new challenges for telecom companies.

Mr Whelan moved on to state that, especially in a low-interest context, infrastructure investments can deliver small but steady returns, while the competitiveness that telecom companies encounter in end-markets results in less secure revenues, with special regard to other non-traditional services they offer. He also stressed the fact that it is the responsibility of the legislator to provide legal certainty for companies that facilitate the EU digital infrastructure, while upholding a level of competition between them. He subsequently stated that, in the last couple of years, the European Commission has made significant efforts in terms of creating an investment-friendly environment without causing negative side effects for the competitiveness of markets, notwithstanding some national inconsistencies in the interpretation of the spirit and the letter of EU legislation.

However, the speaker highlighted that these questions have also been tackled by the European Electronic Communication Code. Indeed, Mr Whelan took this EU initiative as an example of a legislative action which has changed some important market dynamics by upholding a balance between competition and end-user benefits, on the one hand, and the promotion of the roll-out and take-up of high-performance networks, on the other hand.

Following these considerations, Mr Whelan stressed the importance of consistent demand as fundamental for security in terms of the investment in high-quality networks, which is fostered by both incentivising the uptake of digital solutions for individuals, businesses and governments and increasing the skills level of the workforce, as per the four cardinal points of the Digital Compass initiative. The speaker continued by referring to the Digital Decade Policy Programme, which was published in mid-September 2021 and which provides the foundation for a solid cooperation with EU Member States in terms of advancing a multi-pronged agenda.

The enforcement of the digital objectives is not to be achieved by penalising EU Member States for potential non-compliance, the speaker continued, but via incentives created by the funds that are distributed as part of the NextGenerationEU programme. Indeed, he remarked that these funds come with the obligation of using at least 20% of the funding available for digital investments, a process which EU Member States take very seriously, he specified. Moreover, he stated that the approval of 16 national plans for the NextGenerationEU funds already pointed out that the average level of expenditure for national digital plans, up to date, should be around 26/27% of the total amount of the Recovery Fund and added that these funds will be utilised by the Member States to invest across the areas that cover the objectives of the Digital Compass, such as the fostering of digitalisation of public administration and businesses. This process goes along with the possibility of implementing cross-country projects which the Commission steadily encourages and supports, he specified.

The speaker further stressed that the Commission is now reviewing the adequacy of its legislative action and exemplified this process with the current review of the Broadband State Aid Guidelines, which will evaluate state aid rules for the deployment of broadband networks according to their consistency with the 2030 Digital Decade targets. Mr Whelan concluded his speech with a call to exploit the momentum that the shared ambition among the Member States and the private sector actors creates to enable the Digital Decade objectives.

Matthew Newman moved on with the debate by asking Ms Eva Kaili MEP to comment on the coherence of the overall agenda with regard to the EU digital transition and what role the Parliament could play.

Eva Kaili MEP began her remarks by describing that the Digital Decade programme should serve as an effort to increase the accountability and harmonisation of EU national digitalisation plans. She then went into detail about the challenges the European Parliament’s Committees face while working on such complex and often overlapping regulatory initiatives. On the same note, Ms Kaili stated that the aim of the new EU initiatives in the digital domain is to create an array of complementary legislation and she praised the Commission for its work in trying to streamline EU initiatives and rules.

Nevertheless, she also warned against the risks of a differently-paced implementation of digital initiatives across the Member States, as it would negatively affect the objectives of the EU policy process in general, and companies with trans-European business models, in particular. However, against the background of the Covid-19 crisis, which she described as a catalyst for the implementation of digital policies, Ms Kaili stated that the commitment of the Member States to allocate at least 20% of the NextGenerationEU funds to the digital transition is unprecedented and creates a unique opportunity to consolidate cooperation and foster the horizontal dimension of digital investment throughout Europe.

With regard to the challenges described by Mr Fernandez, the MEP clarified that the European Parliament will soon be able to make a valuable contribution to the digital transition, as has been the case with the expected adoption of the NIS 2 Directive. She then proceeded to draw attention to the importance of the roll-out of gigabit networks and the need for demand-side policies to promote the uptake of digital tools. Subsequently, the MEP went on to stress the need to strengthen private investments and, in this regard, highlighted the importance of the process of harmonisation of national frameworks.

Eva Kaili also touched upon the geopolitical context in which the European telecommunication sector finds itself, with special regard to the question of protection of European citizens’ data. Regarding the questions of digital sovereignty and investments, the MEP highlighted the allocation of 2,2 billion euros of the EU budget to the uptake of supercomputers, which she described as essential to the retention of European data in the continent. She also stressed the importance of investments in AI, automation, cloud services and 5G networks as crucial efforts.

She moved on to explain that, with the adoption of the Data Act, new opportunities for innovative business models will arise and added that the legislative efforts of the European Parliament should help overcome the upcoming challenges and create a more streamlined and efficient EU digital environment. The MEP subsequently remarked upon the importance of collaboration among industrial actors and explained that initiatives such as the European Digital Infrastructure Consortium are crucial for the harmonisation of rules in the digital realm.

MEP Kaili concluded her remarks by expressing optimism over the ability of the European Parliament to avoid overlapping and inconsistent regulatory frameworks, despite the multitude of files and the complexity of the digital environment as such.

The moderator asked Alberto Di Felice to elaborate on the question of the increased network usage by large tech players and their share in value creation.

Alberto Di Felice began his reply by stating that discussions about « values » in Europe are usually about creating rules, while one should focus precisely on defining effective business models that create economic value. He proceeded to point out that Europe has been at the forefront when it comes to regulating the telecommunication sector, while adding that this process has also created regulatory dependencies which have affected how companies can evolve and compete.

The speaker further explained that the focus of telecoms regulation has been shifting from fair competition towards how to improve network investment and allowing more services from the telecom sector. Regulation is the main reason why there is an intense discussion in Europe around the issue of value shifting to other players in the value chain. As evidence of this, he noted that the so-called over-the-top (OTT) model has been less of an issue in the US, due to the fact that returns of American telecom companies have been greater compared to the ones from the EU. While the US is probably not the perfect example in terms of connectivity, he continued, telecommunications in the US are dealt first from a business perspective, a fact which explains a better business case for connectivity and consequently the faster roll-out of new networks, particularly new generations of mobile networks, also due to the availability of a higher level of investment capital.

Moving on with his considerations, the speaker warned against a depressed investment market in the EU resulting from over-regulation, which often causes an inability to make the best out of new opportunities. Mr Di Felice stated that some of the current legislative initiatives from the European Commission can be good tools to resolve some of the underlying issues that hamper Europe’s digital economy. The European Data Strategy revealed that there are still significant hurdles ahead in terms of completing the digital single market, as the data economy is still very fragmented throughout Europe. Mr Di Felice also specified that the Data Act and the Data Governance Act demonstrate that using shared data can have a transformative effect on the EU’s economy, particularly on the demand side.

The speaker proceeded to call for coherence among the different legislative proposals from the European Commission throughout the entire legislative process. He also exemplified his stances by referring to the recent reform of the telecommunication framework, which was initially meant to foster investment in the sector for the first time but unveiled frictions between investment and competition objectives over the course of the negotiations between the co-legislators. Mr Di Felice further addressed the matter of coherence of new legislative initiatives with existing legal frameworks by pointing at the example of the ePrivacy Regulation and the GDPR, compliance with which is paramount to successful European data spaces, with special regard to the manufacturing and health sectors.

Mr Di Felice concluded his speech by stating that, if the full potential of the EU digital economy is exploited, the questions of value creation and distribution could be tackled in a different way, as it would be easier for the various sectors of the industry involved in the digital domain to cooperate with each other.

Eva Kaili MEP replied to some of the remarks of the previous speakers by acknowledging that the discussion around how to solve the fragmentation of the European telecommunications market has been taking place for a decade. Against this background, the MEP asserted that all stakeholders in the EU have the necessary experience and expertise to finally succeed in this endeavour, especially now that the roll-out of 5G connectivity is another important objective in view. She exemplified her point of view by referring to the current negotiations around the NIS 2 Directive, which many fear would have led to the fragmentation of the single market, but which, in her view, will deliver more clarity through security by design and will eventually result in more harmonisation at the EU level.

She went on to state that comparing Europe with the US and China is pretty unfair, due to both language and institutional differences. However, the MEP expressed optimism with regard to the fact that, by the end of the current mandate of the Parliament, the EU digital agenda will advance enough to facilitate more funding and make the telecommunication market more attractive for investors.

Although she did not recognise the objective of having only three telecom providers in the EU as a priority, the MEP called for a competition law that supports companies in terms of investing more, also given the current exceptional circumstances. Indeed, the speaker went on to say that an effective 5G roll-out will also stabilise the EU’s position on the global stage. At the end of her remarks and in view of the EU Data Act adoption by the beginning of 2022, the MEP also stressed the importance of creating value for the digital single market in the future.

The moderator moved on by asking Dr Andrea Renda about the EU’s opportunities to become a global leader in the telecommunication sector.

Andrea Renda began by drawing attention to the fact that the broader electronic communication framework in Europe has been in place for nearly two decades, namely since 2002. Since then, the speaker stated, one could probably conclude that cyber policies have been a very difficult balancing act from a policy perspective, while telecom companies have been facing increasing competition both from the inside, due to regulatory requirements in favour of new market entrants, and from the outside, such as from wireless companies and OTT business models.

The speaker proceeded by elaborating on the divergence of strategies between the EU and US, as in 2002 the Federal Communication Commission laid the foundation for the so-called « regulatory holidays », a waiver on regulatory obligations to boost investments in high-capacity broadband networks such as the optical fibre infrastructure. At the same time, the EU took a different approach, Dr Renda continued, and built a more comprehensive, multi-country, multi-level governance framework for the regulation of electronic communication networks that is still largely based on network sharing.

The speaker’s analysis was that today’s differences between the EU and the US telecommunication markets mainly stem from these two different strategic approaches. However, he added that, since then, the US has been encountering insufficient competition on the infrastructure side to serve consumers in the best possible way as a result of their deregulatory approach. He specified that US telecom companies have retained more value compared to European companies, while both are under similar market dynamics.

Dr Renda further explained that the lack of competitiveness in terms of infrastructure projects in the US throughout the last two decades is one of the main reasons for the delay in the roll-out of 5G in America. This lack of competitiveness also affected innovation. This process, he said, is illustrated by the low numbers of 5G-related patents registered by US companies, while EU companies hold the share of around 25% of global patents registered in the telecom sector, with Korea more or less at the same level and China leading at around 30%. He concluded by stating that competition is, however, a trigger for innovation and that the EU’s decision to foster competition was also justifiable, as there was no option between cable and copper in Europe at the time.

As a reason for the decreasing value creation of European telecom companies, the speaker highlighted their role in the digital ecosystem, which increasingly creates value from services and data. Dr Renda also stressed the difficulties of telecom operators to tap into these sources of revenues. He subsequently stated that most of this value has been captured by non-European players whose business models are OTT-based and he reiterated the argument of the fragmentation of the EU’s digital market.

The speaker exemplified this trend by mentioning the 2013 analysis and projections of the European Commission for the period 2008-16, which acknowledged an increase of internet traffic in Europe, North America and Asia Pacific of roughly 1,000% over that period. However, the same forecast indicated a projection of increasing revenues of 35% in the US, 40% in the Asia-Pacific region and a negative revenue drop of 10% for European telecom companies. This setting, Dr Renda explained, is the exemplification of how European telecom companies have not been able to retain a large part of the value creation stemming from digital markets.

A further decade down the road, Dr Renda continued, there has been an acknowledgement of the fact that Europe missed the opportunity stemming from the « first data wave » and, as a result of the publication of the Digital Decade Communication, was put in the spotlight for the first time, as 90% of the data generated in the EU is currently stored on servers in the US, while only around 3 to 4% are located in Europe. He subsequently asserted that this fact and the approaching « second data wave » – which will entail mainly industrial data and data from the edge cloud and the Internet of Things (IoT) – should be a wakeup call for the EU to seize the opportunity arising now in order to enable European companies to position themselves effectively in those markets, while gaining a fair share within the European and global value chains. This is to be facilitated, more than by changing the regulatory framework for electronic communications, by implementing an effective industrial policy which connects all parts of the data economy, the speaker added.

Dr Renda subsequently called for an EU-orchestrated effort in the realm of connectivity, which entails, aside from 5G infrastructure, investments in satellite communication, low-power networks and fibre. He continued by highlighting that creating value from these complementary value chains is the only way for telecom companies to stand their ground and create and retain value in the overall industrial landscape. Dr Renda proceeded by recalling that the EU recently detailed an updated Industrial Strategy, together with efforts to repatriate and rebalance value in the supply chain that will give investors more regulatory certainty and stability. He also added that, given the right circumstances, network sharing obligations can be value-enhancing, can prevent network duplications and, if properly implemented, preserve competition. Indeed, the speaker added that the alternative to network sharing obligations is not more competition but insufficient networks.

In a concluding statement, Dr Renda shared the opinion that there is no obvious case for a strict consolidation of the European telecommunications market. Instead, he called for a reconsideration of the role that telecom companies play in the overall digital ecosystem, given the context of the upcoming « second data wave » and its expected rapid increase in value creation through data usage for embedded AI, IoT and industrial applications, amongst others.

Anthony Whelan took the floor by saying that currently there is a vast amount of value creation going on, a fact which has gotten the European public debate to focus on the question of value capture or value share. Given the large amount of services transferred to consumers, there is no doubt over the high value that is captured in some parts of the value chain, the speaker explained. This is due to the fact that services have a higher return on capital employed, as they need less capital to generate high returns. He further explained that the appearance of gatekeeping market players resulted in them capturing high shares of the generated value.

He then went on to elaborate on Mr Di Felice’s example regarding better business cases in the US market due to higher revenues. He explained that the market needs constant competitive pressure among companies to innovate. Nevertheless, he warned against unsustainable high pressure that might result in negative revenues and the creation of suboptimal investment levels. He also explained how the effects of competitive pressure have influenced the discussion around network sharing in 4G and 5G. Even though a consolidation at the CapEx-intense network deployment level is achievable, it is necessary and feasible to uphold competition on the service side of the business, he added.

With reference to the statements of Dr Renda, Mr Whelan explained that the « second data wave » will be driven by 5G connectivity and fuelled by industrial data, which is expected to take on the role of a « killer-app », a term that describes an application of a new technology or product which is virtually indispensable or much superior to rival products. He further stated that 5G will be different from 3G and 4G, as it will create a different demand for its use by touching upon nearly every part of the economy and society.

The speaker from the Commission went into detail about the issue of market fragmentation by referencing market developments that have revealed that investors are often not fond of the geographical expansion of telecommunication operators. Mr Whelan further added that drawing on the example of China to call for the defragmentation of the EU’s telecoms market is not helpful, as the market structure is similar, merely on a much greater geographic scale than any EU market. He continued to explain that defragmentation efforts can be successful if they bring durable advantages for the customers and consumers, such as better pricing, broader product choice and/or improved network quality. The speaker subsequently stated that the Commission applies a competition policy that remains fact-based when it comes to mergers, the specific conditions on the respective national markets and the criteria regarding customer and consumer benefits.

Mr Whelan concluded his remarks by sharing some insights stemming from the upcoming Daisy Report which indicates the possible continuation of a trend that started in 2018, namely the above-average roll-out of high-speed fixed networks, which could be interpreted as a shift in the investment cycle.

Ramon Fernandez began by agreeing with the remarks made by his co-panellists about the topics of value capture and a renewed EU industrial policy, while reiterating that competition policy should not be the only lens through which the digital domain should be viewed. He subsequently went into detail about the issue of investment returns by stating that telecom companies are the essential enablers of the new digital economy, but he also emphasised that they are at constant risk of being forced by the developments of the financial markets to sell their assets to non-EU competitors. As an example, the speaker from Orange drew attention to the fact that all three competitors of his company in France sold their mobile telecommunication infrastructure. Moreover, he referred to the roll-out of submarine cables, which was historically conducted by telecom companies and is now being deployed by large digital platforms, with telecom operators filling the role of co-investors.

He went on to warn against a marginalisation of telecom players that would lead to a situation in which the EU is not in control of major parts of the infrastructure that is decisive for the competitiveness of its economy and Europe’s digital sovereignty. Mr Fernandez stressed that it was deeply concerning that that investors are shying away from funding telecom companies because the investment environment is not creating enough value for them. Only if the players in the telecommunication sector analyse the structure of the market and prepare themselves for the upcoming « second data wave » can these questions be successfully addressed in Europe, he remarked.

He moved on by listing the efforts Orange has undertaken in this regard, namely co-funding Gaia-X and advocating for the IPCEI for cloud to be amended by telecom-cloud services and open RAN. The speaker then called upon the European institutions to strengthen the EU’s industrial policy, following a global, holistic approach towards digital sovereignty, and to set clear competition rules to create more certainty for investors. At the end of his remarks, he stated that digital companies and especially telecom operators can play a crucial role also in reaching climate ambitions.

Matthew Newman asked a final round of question regarding several matters, such as how to counter growing technology resistance, with special regard to 5G, the appropriate Key Performance Indicators (KPIs) for the Digital Decade initiatives and the pitfalls of the EU regarding the value creation of the digital single market.

Ramon Fernandez replied to the question of the moderator by taking as an example the last French administrative elections when some mayors of large cities expressed serious concerns over a possible connection between 5G and health issues in the course of their campaigns. He explained that only the relentless insistence on facts can lead towards a general acceptance of 5G-technolgies and that both institutional and non-institutional communication is especially effective if conducted at a local level.

Andrea Renda began his reply by drawing attention to the underlying cause of the phenomenon of technological resistance, namely a degree of lack of trust in science. He subsequently warned against a premature assessment of the potential impacts of 5G as a densely-deployed infrastructure before its final roll-out and evaluation and called for a fact-based approach that is taking security concerns seriously into consideration.

On the issue of KPIs, Dr Renda went into detail about proposed indicators of the EU Industrial Strategy that was presented in May 2021. He explained that these are mainly focused on input indicators, such as infrastructure, skills and other areas which create value, while the indicators should serve the purpose of keeping track of medium and long-term goals of the EU’s digital and green transition. Therefore, the speaker from CEPS proposed that the KPIs should be a combination of input indicators and output or impact indicators that allow conclusions about how investments and market developments are directed towards the accomplishment of a just twin transition. In fact, Dr Renda stated that, while there are many ways to spend the 20% of the funds in the national recovery plans that are earmarked for digitalisation, the focus should be on directing these funds towards projects which are lacking private investments. He proceeded by saying that these funds should be dedicated to important objectives such as resilience, sustainability, wellbeing and competitive sustainability.

As a final remark, the speaker expressed the opinion that the digital economy requires a profound transformation which is guided not only by the principle « making Europe fit for the digital age », but also by a reversed approach that allows for a digitalisation on Europe’s own terms. This is the only way in which the EU digital economy can change the current state of play and eventually create more certainty for investments, he concluded.

With regard to the matter of resistance against technology, Anthony Whelan remarked upon three aspects which, in his opinion, need to be addressed. Firstly, the issue of electromagnetic field (EMF) radiation and whether the fact that the legally defined limits for this radiation remain adequate in the context of the 5G roll-out must be communicated better to EU citizens. The speaker continued by elaborating on the International Commission on Non-Ionizing Radiation Protection (ICNIRP) guidance from 2020 and called for a risk-management approach based on those criteria.

Secondly, Mr Whelan addressed the role of the large tech platforms in terms of taking action against disinformation. He explained that major platforms have improved their measures to tackle false information in their communities and inspired other platforms to join the Code of Practise on Disinformation, but more needs to be done.

Thirdly, the speaker from the Commission referred to the Digital Services Act, which is expected to change these efforts from a voluntary basis towards due diligence by giving them more structure.

In his concluding remarks, Alberto Di Felice went back to the core of the discussion by stressing that Europe has several options in terms of policy initiatives and business models that can be fostered. However, the EU should not think that it can add more policy initiatives without fixing core underlying problems that hamper Europe’s opportunities in digital markets.

In this context, he added that the telecommunication sector is justified in focusing on telecoms regulation as a prerequisite to take full advantage of future economic opportunities. He also warned that, for all the talk about new legislative initiatives promising new markets, without fixing telecoms regulation telecom operators will find it difficult to find sufficient resources to move to adjacent business models.

He also expressed disagreement with regard to the analysis of Dr Renda regarding the causes of the telecom sector’s decline in revenues. He argued that, as shown in the Commission’s 2013 analysis shared by Dr Renda, the underperformance of the EU telecom sector in the last ten years is prevalently a direct consequence of the regulatory actions taken decades ago.

The remaining part of the debate and the Q&A session covered the following issues: the EU’s global digital leadership, the matter of resistance against technology and the question of appropriate Key Performance Indicators (KPIs) for the Digital Decade.

Want to know more about the issues discussed in this debate? Then take a look at the selected sources provided below!

Europe’s Digital Decade: digital targets for 2030, European Commission

2030 Digital Compass: Your Digital Decade, European Commission

NextGenerationEU, European Commission

European Industrial Strategy, European Commission

European Data Strategy, European Commission

EU Data Governance Act, Legislative Train, European Parliament

EU Data Act, Legislative Train, European Parliament

The Digital Services Act: ensuring a safe and accountable online environment, European Commission

Code of Practice on Disinformation, European Commission

Cybersecurity of 5G networks – EU Toolbox of risk mitigating measures, European Commission

Proposal for directive on measures for high common level of cybersecurity across the Union (NIS 2 Directive), European Commission

The EU digital decade. A new set of digital targets for 2030, European Parliamentary Research Service

e-Privacy Regulation, Legislative Train, European Parliament

The protection of personal data inside and outside the EU, European Commission

EU radio spectrum policy for wireless connections across borders, European Commission

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State aid: Commission invites comments on State aid rules for the deployment of broadband networks, European Commission

Important Projects of Common European Interest (IPCEI), European Commission

European Electronic Communications Code, European Parliament and Council of the EU

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IPCEI on Microelectronics

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Connectivity & Beyond: How Telcos Can Accelerate a Digital Future for All, ETNO

Radiofrequency Electromagnetic Fields Guidelines 2020, Commission on Non-Ionizing Radiation Protection (ICNIRP)

Gaia-X, The next generation of data infrastructure ecosystem