Policy makers in the European Union and around the world regularly refer to the Internet and the wireless economy as an “important part” of society. Yet outside the group of telecom ministers and other experts, the wireless sector matters to EU policy only as a very specific segment of our economies.
This way of thinking is increasingly out of touch. World-wide, mobile Internet devices will outnumber humans this year. Fifty billion devices — ranging from phones to kitchen appliances and cars — are expected to be Internet-enabled in 2020. The demand for mobile data traffic is exploding, growing by 60-100% each year, and new mobile-related services in the telecommunications, health care, energy and logistics sectors are improving the lives of billions of people.
Wireless technology, in short, is changing the world in the same way electricity once did. The wireless economy is no longer only an “important part” of society — it is society.
For a long time, European policy makers recognized the importance of wireless. Together with important deregulation in the early 1980s, the development of a common GSM standard, or 2G, in 1991 brought Europe to the global wireless frontier. Thanks to GSM and the resulting inter-operability between handsets and networks in all European countries, EU suppliers such as Nokia and Ericsson were able to develop products and services for a “home market” of hundreds of millions of people, contributing to industrial development in the EU for several decades.
Twenty years later, the situation has changed. The EU lags and the U.S. leads. Nineteen percent of U.S. connections are expected to be on LTE networks, or 4G, by the end of the year, compared with fewer than 2% in the EU. Thanks to network operators’ unprecedented investments and consumers’ surging demand for mobile broadband, the LTE networks of the two biggest operators, AT&T and Verizon, cover 85% of the U.S. population. In addition, connections in the U.S. are on average 75% faster than in the EU.
Whereas American carriers benefit from a single market with 341 million wireless subscriptions, their European counterparts are at best faced with a fragmented and patchy telecoms market, and at worst 28 different national markets.
The EU’s Radio Spectrum Policy Program, which was adopted last year by the European Parliament and Council and for which I serve as the Parliament’s rapporteur, aims to remedy some of these shortcomings. It sets a world-leading target of allocating at least 1,200 MHz of suitable spectrum for mobile broadband by the end of 2015. It obliges EU member states to report their current use of spectrum to ensure that it is being used efficiently and that operators are not hoarding spectrum wastefully. This would allow us to assess if further harmonization and reallocation of spectrum at the EU level is needed.
The program also required member states to allocate the 800 MHz frequency band to wireless services by Jan. 1 of this year to cover sparsely populated areas and to increase network capacity. Regrettably, this deadline was only met by around half of the member states, slowing the rollout of 4G across Europe.
It is now up to EU governments to deliver on these commitments. If the EU aspires to be a global leader in wireless, however, we must do more. A second digital dividend in the 700 MHz band is an important and needed reform for growth, helping the EU to exit its economic crisis.
We need a big bang: a pan-European auction of 4G wireless services, with a number of licensees that collectively serve the whole territory of the EU, rather than another round of national licencing. Licensees may well be the result of different consortiums of telecom companies or consolidation between existing players in different countries. Member states should make their spectrum resources available to enable the launch of pan-European wireless services.
The U.S. is already using the 700 MHz band for wireless services. If the EU were to follow, then European companies would benefit from a single trans-Atlantic telecom market, attracting investments from all around the world and creating jobs and economic growth on both continents.
Wireless must no longer be a side issue that only is discussed by telecom ministers and experts. If the EU is to reap the benefits of the wireless revolution, the subject needs the attention of all policy makers.
(published on The Wall Street Journal Europe, 6 September 2013)