Leading CEOs repeat call for rethink on regulation

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Operators say burden of network investment should be spread to online companies

The GSMA has again called for the world’s governing bodies to help drive mobile technology and services forwards by lightening regulation and out-of-date taxes.

In the opening keynote of the 2013 Mobile World Congress in Barcelona, the chairman of both the GSMA and Telecom Italia, Franco Bernabe, emphasised the need for regulators to cut operators some slack.

His comments echoed those in his opening keynote at last year’s event, in which he warned future network investment and innovation would be slow and jobs would be lost unless changes were made.

Speaking before a packed auditorium, Bernabe said the mobile industry is no longer a “luxury industry” of “high margin” business, and government policies concerning tax, competition and investment – such as the need to bid millions for spectrum – need to be updated to reflect this.

Bernabe said: “Mobile is a transformative technology that is connecting the world’s population to the internet. The mobile industry contributes to the development of society, to enable services that improve people’s lives. We will see nearly everything and nearly everyone connected. Technology is allowing a number of services which will greatly improve the well-being of everybody.

“However, mobile operators are paying exceptional investment effort to update the networks to accommodate the growing amount of data traffic. This coincides with a time when revenues are not growing at the same speed as in the past. All this calls for a change in the regulatory and public policy environment in which network operators are working.

“Regulation and taxation is still based on the principle of a luxury industry – with increasingly high margins. But things have dramatically changed over the past years and this is no longer true. The mobile industry is still burdened by a dated regulation and taxation regime while struggling to compete in an increasingly challenging ecosystem.

“Telecom regulators should adopt a light touch approach, and governments should avoid imposing excessive burdens on the industry in the form of specific taxes and spectrum charges. We are all living in a new world: operators, ecosystem players, public authorities.”

Bernabe also called for a rethink on the level of competition in the mobile space, claiming the number of operators and MVNOs in some parts of the world is actually doing more harm the good.

He highlighted Europe as an example, stating there are more than 190 network operators in total, running more than 700 MVNOs – something he claims in some instances is “depressing the market” and is not “economically viable.”

He said: “Mobile operators in most markets are suffering from too much competition. We need to find the right equilibrium across the entire mobile chain, and the sooner we do, the sooner we will be able to concentrate on delivering the promised connected world, a world which will create immense opportunities for everybody and no one will be left behind.”

Bernabe was joined on stage by Vodafone group CEO Vittorio Colao, Telef—nica CEO Cesar Alierta, China Mobile CEO Xi Guohua and AT&T CEO Randall Stephenson, who each echoed his concerns.

Alierta said the “burden” of network investment costs on vital elements such as spectrum, should be spread among other ‘over the top’ players who have built their businesses by relying on the quality of the network.

He said: “The other players in the value chain don’t pay anything at all. This is not a level playing field.”

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