Viewpoint
Ahead of our Gigabit Access 2017 conference, Total Telecom caught up with keynote speaker Anna Krzyzanowska, Head of Unit, Investment in High Capacity Networks at DG CONNECT to discuss the new targets set out for EU telcos in the European Electronic Communications Code, the evolving role of DG Connect and how Europe can deliver the Gigabit Society.
Can you outline the work the European Commission is doing to deliver enhanced access networks across Europe?
Since we adopted the Digital Single Market Strategy we have multiplied our effort to incentivise the modernisation of connectivity networks across Europe that are the condition (necessary, although not sufficient) of the success of the Digital Single Market. We have launched and we are implementing a number of regulatory, funding and policy measures to support investment in such networks. On the policy front, we set direction and called for ambition with the connectivity objectives for 2025, for socio-economic drivers, for 5G and for all European households. On the regulatory side, investment in very high-capacity networks has become a key objective of the proposed European Electronic Communications Code. The implementation of the cost Reduction Directive will also clearly help the deployment of such networks. On the funding front, around EUR 6 billion of European Structural and Investment Funds (ERDF and EAFRD) is allocated for the roll-out of high speed broadband networks for the period running from 2014 to 2020, especially in rural and peripheral areas. We are also working on new funding instruments, more focused and more efficient. We launched the Connecting Europe Broadband Fund in December 2016, which should be operational mid-2017. We also proposed the WiFi4EU initiative to give citizens a taste of Gigabit Society in main areas of public life for between 6000 and 8000 communities.
How has the role of the European Commission DG Connect evolved as broadband has become essential to the EU’s future prosperity?
As far as I can remember, we have always cared about broadband in our digital policy, first by keeping prices in Europe low through competition, than by setting broadband targets in the Digital Agenda for Europe to enhance ambition. Itt is true that the connectivity has now taken another dimension as digital networks are increasingly becoming the arteries of the Digital Single Market. And this is not only about prosperity, growth and competitiveness; this is also about improving everybody’s daily life and ensuring territorial and social cohesion. So the most notable evolution is that connectivity has become a central policy objective. We need widespread deployment and take-up of very high capacity networks, in urban as well as rural areas, to achieve the full economic and social benefits of the digital transformation. And from there we have set up a truly comprehensive policy where we have aligned our regulatory and funding tool towards the connectivity objective.
What are the biggest challenges the EC faces in delivering the Gigabit Society?
First, investment! To achieve our objectives for 2025 we need to bridge an investment gap of over EUR 150 Billion. This will require more investment from both the private and the public sector, but also smarter ways to spend them. This is why our connectivity package and other instruments aim at incentivising investment in a number of different ways.
And there is another important challenge, increasing the speed of take-up so that demand further drives supply. On this latter aspect, I trust that all the measures implemented in the framework of the DSM strategy, from the cross-border flow of data to improving digital skills through increasing trust and confidence in digital services will have a strong impact. What is encouraging that investment in state-of-the-art networks does not seem to require demand stimulation – latest research by iDate demonstrates very comfortable take-up rates for FTTH projects.
How will the European Electronic Communications Code deliver opportunities for European telcos and society and economy more widely?
The Code will contribute to boost more investment and infrastructure competition, with society as large being the ultimate beneficiary. As such, the Code is inherently linked to the Gigabit society strategy and its connectivity targets. The Code and the regulatory approach therein is a means, not an end in itself. To achieve that, the proposed Code makes targeted changes to market regulation improving risketurn profile for new investments. It is a vital signal to the international investment community, enhancing predictability and allowing adequate scope for adaptation to localised network conditions.
The new Code substantially removes regulation where rival operators co-invest in very high-capacity networks and makes it easier for smaller players to be part of investment projects, thanks to the pooling of costs. New rules make the investment case more predictable for "first movers" who take the risk to invest in those networks in less profitable areas, such as rural areas. With the new Code, it is not only about competition for access to networks anymore, but also competition for investments in these networks. The Code provides for more precise regulatory tools which will be used to address the specific market conditions, based on in-depth local knowledge of an increasingly diverse network landscape.
What is the single most important change you have witnessed in telecoms since you joined the industry?
There has been a number of changes but from my perspective – which focuses on investment – the most important change is the interest in very high capacity broadband project of new investors who rely on funds from insurance companies and pension funds. As I said and I will never repeat it enough, there is an important need for very long term investment in the telecom sector. On the other hand, there are investors who need long term projects with regulatory predictability and stable returns. So this is a main change: even if traditional telecom companies remain logically the largest investors, the times when only the telecom industry, with some public support, was investing in the broadband infrastructure are now behind us.
What excites you the most about the telecoms industry today?
The telecom industry goes much beyond the telecom sector itself and impacts broadly on our society and economy. That is a really exciting aspect. The Telecom industry is not anymore about providing telecommunications between individuals, it is also about connecting data environment the individuals live and work in – their cars, their homes their public records, everything they might place or use in the cloud. It is about new ways of living, working learning and having fun. So definitely when I work in the Telecom field I feel I work for our economy and society broadly speaking.
You can hear more from Anna at Gigabit Access 2017, being held in Brussels, Belgium on 4th and 5th April. To find out more about the conference visit the website where operator access specialists can apply for a free guest pass.
