In 2012, mobile data traffic grew exponentially, posing enormous challenges. Three issues are at the top of our agenda: the frequency spectrum, privacy and investments.
– Spectrum: Not only is it critical to acquire additional spectrum, we need to focus on reducing fragmentation across technologies and bands, while ensuring that allocation is done in a cost-effective manner.
– Identity and privacy: as we move towards the digitization of everyday tools (money, keys, documents, tickets…), the safeguarding of digital information becomes increasingly important. Operators play a vital role in ensuring identity and protecting privacy.
– Investments: Optimizing investments depends on three factors: economies of scale, a predictable business ecosystem, and an up-to-date regulatory environment.
One of the major challenges for our sector is the creation of economically sustainable competition: in an increasingly complex ecosystem we have realities in which a couple of players dominate the market by limiting competition, others where competition is excessive and depresses the market. We see this clearly in Europe, where heavy regulation has led to the creation of over 190 mobile operators.
Regulation and taxation are based on the principle that mobile telephony is a luxury sector with ever higher margins, while things have drastically changed in recent years. The furniture industry is today saddled with outdated regulation and taxation as they struggle to compete in an increasingly challenging ecosystem.
Our industry is going through an unprecedented transformation. Technology is enabling a massive number of new services that will dramatically improve well-being for everyone. However, the central role of mobile network operators is today challenged by the emergence of new players from the world of software and hardware, while they are called upon to make exceptional investments to update networks in order to meet the growing amount of data traffic, with revenues decreasing compared to the past.
All of this requires changes to the ecosystem in which mobile network operators operate, both in terms of regulation and public policy:
– regulators should adopt a “light touch” approach, letting market forces operate more freely;
– the antitrust authorities, while protecting the market against any abuse, should allow the sector to reorganize itself in order to face the new competitive context;
– Governments should avoid overburdening industry through specific taxes and spectrum-related costs.
