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EU digital tsar 'Steelie' Neelie Kroes: Telcos must adapt to losing roaming cash

With less money you will do more

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+Comment Europe's digital tsar Neelie Kroes has been defending her call for greater integration of telcos across Europe, and appears to be arguing that what she described as "artificial" lowered roaming revenues should not hinder the telcos' greater investment in European infrastructure.

Neelie's plan is to get rid roaming charges across Europe by forcing operators to scrape them altogether, or offer customers the almost-impractical option of an Alternative Roaming Partner, but operators won't give up on their revenue stream so easily and are lobbying to water down the legislation before it goes to the vote.

Speaking at the FT-sponsored Summit in Brussels, the unelected VP of the European Commission, told operators that the Net Neutrality and roaming-free legislation would increase investment and drive innovation, despite temporarily hitting profit margins.

"In fact, the artificial revenues from roaming would not give you the capital needed for next generation investment. That comes from the financial sector, from the investment community."

Comment

Kroes appears to be pretty annoyed that operators keep giving money to their shareholders. She said about Vodafone's recent £84bn windfall: "My wish is that the money will be spent in your [the telecoms] sector, and not put in shareholder's pockets. Europe badly needs good infrastructure."

She has said she wants operators to plough more money into building new infrastructure. There's no point in claiming that money from roaming will pay for that, as in a self-fulfilling prophecy the EU tsar points out that roaming revenue will vanish within a few years.

The speech also brings up the idea of a European spectrum regulator again, something of which the EU has long dreamed. Ofcom, the UK's regulator, is staunchly opposed to that idea, mainly because the UK has a very liberal spectrum market and would be dragged backwards by an EU overlord, but also because an EU regulator would risk politically motivated standards being mandated without a business model to back them.

So network operators will have to cope with separate regulators for the foreseeable future, and so address a fragmented market which will become more fragmented as radio kit gets better at slipping into frequency blocks with geographical limitations, before we know it the whole of Europe will need a White Space database just to operate normally.

What Neelie, or the EU, won't do is tax the over-the-top companies who are bleeding operator revenues, they will only be targeted once the network operators have been dealt with.

"We do have to look at taxation across the wider sector, and getting a level playing field, but that comes afterwards. And that shouldn't involve more regulation in the sector, but lifting regulation in competitive markets so that EU Internet providers can offer the services and connectivity Europe needs," said Kroes.

...So the way to stop Google taking revenue from network operators is to deregulate the operators so they can compete with Google, which should prove interesting. ®

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