GSMA calls for EU ‘fair share’ and mergers support amid traffic growth

The GSMA has backed ‘fair share’ demands for Big Tech to contribute to network costs and called for more European Union leniency on telco mergers in the latest version of its annual European Mobile Economy Report, which forecasts continued growth in data traffic with 5G adoption.

The report from the non-profit group forecasts that mobile data traffic in Europe will almost triple over the next five years as 5G coverage and capacity improves across the continent.

Within the next three years, GSMA expects the number of 5G connections to overtake 4G and represent more than half of the total, rising to 87% by 2030. By then, 4G will account for 12% of connections while use of 2G and 3G will be negligible, it says.

While the fair share argument has gained telco support this year, it seems the Commission might be cooling on it. It has reportedly postponed the decision, passing it on to the next Commission, which will emerge after the EU parliamentary elections in June. Many European leaders are said to be against the idea (paywall applies), including the German state secretary for digital and transport, Stefan Schnorr. A preliminary assessment by the Body of European Regulators for Electronic Communications (BEREC), meanwhile, concluded that there was no justification for such direct compensation.

Call for merger rethink

The GSMA paints a rather grim picture of Europe’s mobile industry. It says market fragmentation has left “operators below the minimum viable scale to meet network investment targets,” especially when it comes to 5G deployment. It goes on to call for a re-evaluation of EU merger policy, which would take into account the role of minimum long-term viable scale in markets with high fixed costs.

The EU’s reluctance to allowing telco consolidation is currently being tested by Orange and MasMovil, which have agreed to merge their Spanish operations if regulators approve the deal. The block’s antitrust regulators have voiced concerns over reduced competition and prices in case it is allowed, which is a common argument against such mergers.

Reuters has, however, reported that some progress has been made in negotiations. It cites unnamed sources as saying a possible solution would see the parties sell off assets, possibly to Romanian telecom holding company Digi, owner of Spanish MVNO DigiMobil.

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