The leaders running three of Europe’s largest mobile network operators kicked off MWC Barcelona today with almost equal measures of optimism and gloom.

CEOs at Telefónica, Orange, and Deutsche Telekom were visibly energetic to be back on the world’s stage at the wireless industry’s largest annual confab — the first in-person event hosted by GSMA in Europe since February 2019. None of the executives missed the chance to prod the continents’ politicians and regulators, complain about operators’ diminished take in digital profits, or share visions for a more equitable, sustainable, and purpose-driven society riding on hyperconnectivity.

“The digital world has wiped away the old rules of the analog world,” Telefónica CEO José María Álvarez-Pallete López said, kicking off the event in his and the operator’s home country. 

'We Need New Rules For This New World'

“We need new rules for this new world. We need to react to keep up with the opportunity. To grab it, Europe needs a sustainable tech sector. Otherwise, we will lag further behind in the global race for digital leadership. The time to kick the game ball is now,” he said. 

Stéphane Richard, chair of GSMA and CEO at Orange, weaved some semblance of hope and opportunity out of the previous 18 months of despair. “To be alive today is still to be among the luckiest people who have ever lived,” he said. 

“I believe the solution to such big problems, from the digital divide to trust in the digital life, as well as climate change, calls for the deployment of more technology, not less. With 30 million employees, $2.7 trillion capex since 2000 and $1 trillion to come for 5G in the next few years, [and] with 40% of the world's population covered by 5G networks by 2025 and 25 billion IoT connections, the mobile industry has the power to make the difference,” Richard said. “We have the capability to increase trust for our customers, to enable development, and reduce the burden on the environment through technological progress.”

Tech Platforms Ride on Operator Investments

The most forceful criticism of the regulatory environment faced by European-based operators came from Deutsche Telekom CEO Timotheus Höttges, who joined the opening keynote via video feed. “Our societies, our governments have kicked the can down the road over the last one and a half years,” he said. 

Höttges bemoaned that 80% of network traffic is generated by over-the-top platforms that don’t pay anything to use that infrastructure, and yet receive all the value generated by that data. “The more data load that’s produced on our network, the value they are generating, and the ones who are paying the bill at the party are the telco operators. Is that a fair equation?” he as. 

Network operators “will still be at the center of everybody’s needs” in 2030 but society will be more purposeful with respect to our collective impact on the environment and global equity, and “connectivity will be a human right,” he said, adding that current operator business models and regulations aren’t yet designed to meet that vision. 

“Our telco playing field was rather easy until recently — generating ownership economics by limiting the number of players in the fixed and the mobile world. So the bigger the platform, the higher the economies of scale, the better the data prices which we can offer. This is changing, and we will see more and more networks to come,” Höttges said.

He doesn’t expect further European operator consolidation so much as an extension of networks from other players that will blur the lines between different modes of connectivity. “All of these different networks have to get orchestrated to provide the best ubiquitous data,” he said.

“I believe the telco of the future will be a network of networks. We’ll be the one who’s able to orchestrate different technologies in the best way. You don’t always have to own your infrastructure,” Höttges said. Winners in the space will orchestrate multiple networks as a “one-stop-shop for connectivity,” and “telcos will evolve into platform-like architecture with data and software integration.”

European Operators Face Diminished Returns

European operators have the vision, technologies, and knowledge to blanket the continent with 5G coverage by 2030, but economics in less populated regions will require some form of public financial support, Richard explained. “This is going to question also the framework of our sector, which is based on competition on infrastructure in networks,” and a business imperative that those infrastructure investments lead to profitable returns.

“I’m competing with a whole new world of players and the pandemic has totally opened this competition in the digital space,” Álvarez-Pallete López said. 

“Regulation today is based on the networks of the previous century. There are brand new networks, there are brand new players, there are brand new competitors on the access side, but also the over-the-top side, so I’m no longer competing with my traditional competitors,” he added. 

Álvarez-Pallete López also framed the role of tech platforms against the means by which they make money. “This technological revolution has created a new production factory. Until now, we just have capital and labor. Now we have data, and data is like my dignity. It can now be expropriated without compensation, so we need digital dignity,” he said.

“Every day we generate tremendous amounts of data. Our life gets exposed in the digital world as it never does in the analog world. Data has become a new production factory. Our privacy and our digital data are part of our dignity. We have the right to know who is using it, how much it is worth, and who benefits from its value,” he said. 

“We need to defend our fundamental values and Europe is the center of humanist values. The digital revolution is a once-in-a-lifetime opportunity to reimagine the future.”