EU Says Plan to Boost Bandwidth Could Add $1 Trillion to GDP

  • Commission’s proposal to boost internet speeds by 2025
  • Action plan to speed 5G mobile network deployment across EU

The European Commission proposed new regulations that would speed telecommunications networks across the EU and trigger investments that it says could boost economic output by 910 billion euros ($1 trillion) and create 1.3 million new jobs by 2025.

Getting there is expected to cost 500 billion euros over the coming decade, funds that will largely have to come from private sources, the commission said in an e-mailed statement Wednesday. To stoke investment, the EU said it would “substantially” cut regulation where rival carriers co-fund high-capacity networks. The commission also presented an action plan to deploy 5G mobile networks across the region from 2018.

“The overriding aim of the reform is to stimulate and encourage investment in ultrafast broadband infrastructure,” said Matthew Howett, an analyst at research firm Ovum, in a note. “This has mostly been achieved by relaxing some of the now largely outdated rules faced by telcos.”

Easing restrictions on cooperation could benefit some of Europe’s largest phone carriers, who shoulder many of the costs to improve networks but have bridled at rules they say stymie investment. Carriers in the past have complained about EU proposals on so-called net neutrality and the allocation of wireless spectrum for next-generation 5G networks.

“Without first-class communication networks, there will be no digital single market” said Andrus Ansip, EU commissioner in charge of digital issues. “We need connectivity that people can afford and use while on the move.”

The commission said its draft aims to reduce divergence between regulatory practices across the EU in the area of radio spectrum. It proposed long license durations, coupled with more stringent requirements to use frequencies efficiently. The EU also aims to make investments more predictable for carriers investing in less profitable areas, such as rural fixed-line networks. The 5G plan has the potential to create 2 million jobs in the EU, the commission said.

“The commission has rightly recognized the need to encourage the efficient and timely release of spectrum and to promote the certainty afforded by longer license periods,” GSMA, an organization that represents mobile operators, said in an e-mailed statement. “Its spectrum proposals can contribute to addressing the fragmented and inconsistent approach that exists across the EU today.”

To protect consumers and promote a single market for phone services, the EU has already capped roaming fees -- surcharges incurred by customers traveling outside their home country who use their handsets to call, or surf the Internet -- and they will disappear altogether by June 15 next year. 

Fierce criticism forced the EU last week to withdraw a proposed limit of 90 days for how long phone users could call on reduced rates outside their home country. EU Commission President Jean-Claude Juncker said a new draft would be published next week.

Before the EU decided to ban roaming, phone companies had said that would deprive them of profitable business in a market overcrowded with dozens of carriers and weak economies in several European countries.

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