Digital Infrastructure of the Highest Quality is Essential for Europe's Prosperity

Telecom Business Review | Wednesday, March 29, 2023

Europe must invest in digital infrastructure and rebalance the digital market to meet the EU Digital Decade targets and ensure economic growth.

FREMONT, CA: To achieve a competitive economy and world-class digital society, Europe must address the disparity in the digital market. Although telecom operators invest significantly in digital infrastructure, their investment levels are insufficient to meet the European Union’s digital and connectivity targets. Visualising the future technologies integrated into one's daily life requires imagination. Just a decade ago, smartwatches and plug-in-keyboards for tablets were considered revolutionary concepts. While we often experience these technological advancements through hardware and software, they are only made possible by enhanced connectivity.

To maintain an accustomed high standard of living, significant investments in telecommunications infrastructure are necessary. However, outdated payment models obstruct telecom operators’ ability to independently fund such investments.  Therefore, rebalancing the market is essential for ensuring the future quality of life, prosperity, and competitiveness.

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Being able to Position Time Ahead Technologies will Decide Europe’s Prosperity

In the forthcoming years, it could be a common phenomenon to send virtual avatars to shop for clothes in the digital mall or attend classes in virtual schools without physical buildings. Wearables, skin sensors, and in-body sensors will track health in real-time,  enabling individuals to respond promptly and prevent diseases, easing the burden on national health systems. It is possible that digital twins will become so advanced that they serve as digital body doubles, aiding in predicting future health.

What might appear to be a concept from a science fiction novel could soon become reality. The Covid-19 pandemic has demonstrated how quickly one can adjust to new technologies and incorporate them into daily life. After an initial period of astonishment, it may become commonplace for quantum computers to process the numerous variables in the intricate weather system, that currently renders meteorological predictions similar to fortune telling. This could enable us to determine when and how much to irrigate fields when to harvest crops, or when not to travel due to unfavourable climatic conditions.

European Union set Aspiring  Objectives  for Enhanced Connectivity

The telecommunications infrastructure must be capable of supporting the enormous amount of data and increasingly demanding levels of service quality required by these technologies. Telecom operators throughout Europe will have to increase their already substantial investment to keep up, the fact is that Europe is already lagging behind in terms of digitalisation. The United States, China, and Asia are making significant progress in next-generation connectivity, and digitalisation throughout the economy.  It is not just referring to bandwidth for more video streaming or gaming, but advanced connectivity is critical to future-proofing technology.

Teleco’s network's role is crucial in determining the competitiveness of European enterprises and citizens. The world economic forum anticipates that high-speed internet access worldwide that could democratise computing and generate trillions of dollars in economic gains and millions of jobs.  The network will be instrumental in realising these benefits, but only if there is a significant investment in them.

Over the past ten years, data traffic has been growing at a rate of approximately 30% annually, while the revenue of telecom operators has remained stagnant. Telecom companies are having difficulty generating revenue from data, but they must continue to make significant investments in ultra-broadband networks (UBB). This inability to earn sustainable returns could jeopardize the long-term development of the network and hinder the EU's Digital Decade objectives. Therefore, action must be taken urgently.

The commitment to achieving the Digital Compass goals is unwavering. By 2030, all European households should have access to a Gigabit network and 5G coverage. To achieve these targets, European telecom companies such as Telefónica are investing heavily in digital infrastructure. They are upgrading the fixed infrastructure to gigabit speeds and accelerating 5G deployment to address coverage gaps. Additionally, they plan to install 10,000 low-latency edge nodes.

Proposal to Balance the Digital Market

The European Union needs to mandate that LTOs are obligated to negotiate and agree on a reasonable and proportional fee for the services they receive. This legislation would allow network operators to increase their investments in digital infrastructure to meet the EU's digital targets and encourage Local Telecom operators (LTOs) to deliver traffic more efficiently for the benefit of the ecosystem.

The EU needs to take action to ensure that LTOs contribute to the investments needed to build top-quality networks. Currently, consumers are the only ones contributing to the investment needs for the transition to 5G and fibre. The EU must take action to close the investment gap so that it can achieve its ambitious connectivity goals. This will prevent European citizens and businesses from living in a second-class digital society.

It is imperative for Europe to take action now and invest heavily in digital infrastructure to ensure the continent remains competitive and prosperous in the future. This will require significant investments from telecom operators, and a rebalancing of the digital market to support their efforts. The targets set out in the Digital Compass must be met, including providing all European households with access to a Gigabit network and 5G coverage by 2030. Failure to do so could put the success of the EU Digital Decade targets at risk and hinder future economic growth.

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