Like all critical infrastructure – roads, electricity, water – our telecoms and digital connectivity can often sit invisibly within our lives, only noticed when something goes wrong with them.
This understates their value and importance as we, in Europe especially, take for granted amenities that others around the world do not necessarily have such ready access to. There are now 471 million people across Europe who use mobile internet services, equivalent to 79% of the adult population, with all but 1% of citizens living in areas with coverage available to them.
This in turn has direct and indirect benefits for Europe, in particular its economy. The mobile industry contributes €1.1 trillion, or 5% of the continent’s GDP, each year – a number which will only continue to rise.
The GSMA’s recent Mobile Economy Europe report also highlights the 3.4 million European jobs the mobile sector drives. On an industrial and financial level, this is a significant and important sector. However, if we are to ensure it continues to grow and thrive, and in turn allow businesses and individuals to do similarly by benefitting from this connectivity, it urgently needs regulatory reform and support.
A connected, competitive continent
2025 finds Europe at a crossroads, with a new European Commission tasked with supercharging the digital economy in the context of EU Digital Decade targets which, less than five years out from their deadline, look improbable at best.
“Competitiveness” is a clear and pressing priority in Brussels following stark reports from Enrico Letta and Mario Draghi last year and in light of heavyweight investment commitments in AI from other major economies, most notably the USA. As AI drives exponential traffic growth across our digital infrastructure, so this infrastructure becomes even more important as an enabler of innovation and industry rather than a limiting factor.
While 5G is set to become the dominant mobile technology in Europe next year, this is the result of significant investment to date from telecoms operators, and still leaves many millions of people without these crucial high-quality connectivity By the end of the decade, attention will already have switched to the next generation of networks, with other regions well placed to steal a further march on Europe with both their roll out and then monetisation.
An industry serving almost 500 million people and driving more than €1 trillion in revenue should be a crown jewel property for Europe. When its role as a key facilitator of other business, of innovation and of AI advancement is also factored in, the case for this investment looks self-evident – this is infrastructure Europe simply cannot do without, especially with data traffic expected to almost treble over the next five years.
Closing the investment gap
The question is how to stimulate this investment. Operators have already invested more than €500 billion of their own capital, largely into 5G networks, over the past decade.
While capex for 2024-2030 is forecast to be €175 billion, more favourable conditions need to be stimulated to increase the investment pot available and reach levels sufficient to cover the improvements Europe already requires.
Current regulation prevents the telecoms sector from benefitting from the bloc’s notional Single Market properties – and therefore unlocking investment – and needs urgent revision, including the EU telecoms Code, merger review rules and EU spectrum policy.
Many of these issues are by now well known and the consequent impatience is due to the lack of movement at a time when Europe cannot afford to stand still – by definition, this only means falling further behind its leading global peers. The investment gap needs to close, and fast.
Networks of the future
Ultimately, connectivity has never been more essential for Europe’s businesses and citizens to compete, succeed and innovate.
Early indications for 2025 are encouraging, with the Competitiveness Compass acknowledging the need to simplify regulation and prioritise speed and agility while paving the way for a Digital Networks Act by the end of the year.
What is crucial now is that this regulatory reform delivers what Europe needs by providing us with a pro-investment platform to ensure its citizens and businesses can benefit from the digital connectivity they need, and that will drive success and innovation across the continent.
