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New Study by The Boston Consulting Group for ETNO Calls for Pro-Investment Agenda to Deliver Digital Single Market


19 Jul 2013


Innovation & Enterprise
Telecoms Regulation Reform Could Deliver EU Countries up to €750 Billion in GDP growth and 5.5 Million Jobs

BRUSSELS, July 19, 2013–With significant reform of the current patchwork system of regulations governing telecommunications in the European Union there could be up to €750 billion in GDP growth and 5.5 million jobs by 2020, according to a new study by The Boston Consulting Group (BCG) for the European Telecommunications Network Operators’ Association (ETNO).

The study, Reforming Europe's Telecoms Regulation to Enable the Digital Single Market, details how a reformed regulatory framework can both safeguard competition as well as incentivize the investments in advanced next-generation access networks (NGA) required for the EU to reach its Digital Agenda targets and for the European Digital Single Market to become a reality.

While it has long been a leader in innovation and the technologies that comprise the backbone of the digital economy, Europe has fallen behind in ultrafast mobile and fixed Internet connectivity. Many markets in Asia and North America enjoy fibre access penetration that is up to 20 times higher and penetration of LTE that is as much as 35 times greater. The BCG study projects that by 2020 the shortfall in investment needed to meet EU Digital Agenda targets for broadband coverage and penetration could aggregate between €110 billion and €170 billion. The result for European consumers and businesses is slower, less reliable connections, leading to less value for consumers and lower economic growth.

The findings of this study come at the right moment, when a reform of telecom rules is being launched by the European Commission, showing how the telecom sector can help growth and jobs in Europe if given the right regulatory conditions. The sector needs a long-term policy view that goes in the direction of favouring investments and avoids measures that might destroy market value”, said Luigi Gambardella, Chairman of the ETNO Executive Board.

 “There has been an ongoing consensus in Europe about the challenges the European sector is facing, but this is a unique attempt to find the underlying causes and to offer a comprehensive program to get the Digital Agenda back on track and therefore European citizens could all benefit from its results. The study quantifies the impact of the required measures. This is essential to have an informed debate about the Single Market in Europe,” said Daniel Pataki, ETNO Director.

Europe’s consumers may find themselves in the position of paying relatively low prices for online access but largely missing out on advanced services and experiences that next-generation access networks provide,” said Wolfgang Bock, Senior Partner of BCG.

European investment in telecommunications infrastructure has declined by approximately 2 percent a year over the last five years, meaning that some €3.5 billion less was invested in 2012 than in 2008. In contrast, infrastructure investment in comparable international markets has increased at about 2 percent a year over the same period. Europe’s ability to invest in next generation networks may fall further as revenues in the European telecommunications sector continue to contract, by as much as 2 percent a year through 2020, according to BCG estimates.

One of the root causes of this situation is outdated and intrusive regulation that distorts market-based competition and discourages capital investment, particularly by telcos, in NGA. These trends must be turned around if Europe is to remain innovative and competitive in the global digital marketplace. Doing so requires a shift in the approach to regulation towards a new paradigm centered around:

  1. A harmonized—and substantially reduced—pan-European regulatory approach, relying mostly on established competition law
  2. A short- and long-term comprehensive view of all the costs and benefits for consumers which takes into full account the long-term benefits of investments for consumers
  3. A full view of the value chain, in a technology-agnostic manner and with a differentiated geographic lens

The study proposes five measures that will reverse the regulatory root causes of lagging telecommunications investment and help to unlock the funding required to build the ultra-fast connectivity that is increasingly the lifeblood of the digital economy:

  1. Substantial deregulation of fixed-line wholesale access
  2. A level playing field for network operators and digital services providers
  3. Spectrum policy that accelerates the build-out of mobile networks
  4. Permitting healthy consolidation in mobile
  5. Harmonizing rules and procedures to unlock cross-country synergies

Taken together, BCG estimates that these five measures would increase telecom operator cash flows by a cumulative total of €105 billion to €165 billion by 2020 and asserts that a significant portion of these funds would be available for additional investment in next-generation networks.  Along with the rollout cost savings that DG Connect initiatives, such as the pending "less digging = more broadband" regulation, are expected to deliver, this program would significantly close Europe’s next-generation network investment gap, fuel growth and add jobs, and bring the goal of a vibrant Digital Single Market much closer to reality. 

The full BCG report is available here.

About ETNO

ETNO has been the voice of Europe’s telecommunications network operators since 1992 and has become the principal policy group for European electronic communications network operators. Its 50 members and observers in 35 countries collectively account for a turnover of more than € 600 billion and employ over 1.6 million people. ETNO companies are the main drivers of broadband and are committed to its continual growth in Europe. ETNO closely contributes to shaping the best regulatory and commercial environment for its members to continue rolling out innovative and high quality services and platforms for the benefit of European consumers and businesses.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 78 offices in 43 countries. For more information, please visit

For more information, please contact:

Ralph Lloyd-Davis (ETNO) Tel: +32 2 227 10 88 Email:

Christoph Schlueter (BCG) Tel: +49 69 9150 2237 Email:




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