Speech - A connected continent for European competitiveness

European Commission

Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

A connected continent for European competitiveness

BusinessEurope Executive Committee /Brussels

17 October 2013

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It's a pleasure to speak to you today.

As you know, we have just issued new proposals for a connected continent.

On paper those measures are about the telecommunications sector. And that's where - predictably - the loudest reactions have come from.

But in fact this proposal doesn't just concern one sector, it concerns European competitiveness across the board. And it's time all businesses took this just as seriously: businesses of every shape, size and sector.

Take it seriously, by looking at the interest of our whole economy - not any one vested interest. By looking to the amazing new opportunities of the future, not to the rip-offs of the past.

That's why I'm glad to have you here today.

We have many new digital innovations on the horizon. Innovations to spur productivity and performance for everyone.

In that world, connectivity is economic oxygen. Everyone needs 21st century infrastructure to compete. Every business is a digital business.

In sectors from online retail to chemicals.

In functions from logistics to banking.

Tools from cloud computing to social networking.

For businesses large and small.

All of them help you perform and compete.

I know what problems businesses face. I know when you're sat around a boardroom trying to ensure the best possible future, and stay ahead of the game.

But the game is a digital one. The Internet is rapidly entering a new era. From big data to the Internet of Things, it can transform everything we do.

If we want to lead we have to act now. Not in 2020, not next year, but now.

Europe has to ride that wave, not drown in it.

Our digital agenda is about helping Europe capture these opportunities. Addressing the whole ecosystem.

From supporting a vibrant startup ecosystem. To ensuring the digital skills for the future.

And it's about bringing down barriers within our digital single market. So content, applications and other digital services freely circulate. To a market of 500 million connected citizens and countless digital businesses.

We are ensuing the rules ensure that unified, secure digital single market.

And we are investing in tomorrow's innovation, from big data, to electronics, to 5G mobile.

But ultimately, all digital innovation relies on one thing: telecoms networks.

And those networks, that broadband bedrock, can only be provided by a European telecoms sector that is strong, healthy and dynamic.

And that is what our Connected Continent proposal is about. Giving those telecoms operators the chance to offer you, and every European, the innovative, pan-European services of the future.

I have to say the loudest reaction has been against just one or two elements: on roaming and intra-EU calls. Those voices speak out against fairer prices for calling and texting across European borders; against bringing new pan-European, roaming-free deals onto the market.

Well I think you know my views. Roaming isn't just an irritant for those travelling in Europe. It's not just a reminder of borders that are supposed to have disappeared.

It's actually not sustainable. Pretty much all market analysts agree: for the most part they've already discounted those roaming revenues.

I know you are preparing a statement on our proposal.

But here's my tip for it. Don't look at protecting vested interests. Look at safeguarding Europe's strategic interest.

Don’t look at the cash cows of the past. Look at the opportunities of the future.

The fact is, roaming rip-offs don't lead to investment. They never have, and they won't.

Do you invest in new, improved infrastructure as long as you can make easy money from roaming, without any upgrade? I doubt it; why should it?

In the era when you paid six euros a megabyte to check your email abroad: did that money go to investment? I see no evidence at all.

Is it indeed possible that such a transient, unsustainable revenue source could lead to long-term investment? I doubt it.

In the era when most travelers turned off their phones for their entire trip: who exactly benefited from that?

I suppose it should come as no surprise that some want to cling on to those revenues as long as possible. But you shouldn't accept everything they tell you.

And remember that our proposal is not mandatory, not based on regulated prices. That's not an approach we can take forever, even if I'd want to. Rather, I am proposing a voluntary approach based on market deals.

If someone tells you they're scared of those market mechanisms, scared of opening up to that competition, I'd be pretty sceptical. I'd ask myself why.

And remember: who's paying those roaming charges? It's you: you and your members. Business customers can't travel and work across Europe without facing a huge bill. A unfair bill which you end up paying.

Let me tell you what does lead to investment. It's planning for high-quality, high-speed services that people will value. It's services and business models that exploit our economy's growing need for data. Services that innovate to help you and your business. That’s what we should be aiming for.

Tomorrow's telecoms business models are built on data. They won't be built on roaming, any more than they're built on faxes and telegrams. Nor on guaranteeing scarcity. But ensuring plentiful broadband, and the tailored innovative services that use it.

And we deliver that by bringing down barriers for economies of scale, by allowing innovation, and with a predictable and stable framework in the areas that matter for investment. That is exactly what we have put forward.

There's a huge opportunity on offer for a digital Europe. But I'd like to ask you some questions.

Do you think connected cars will take off if they have to pay roaming charges?

Do you think connected devices will take off without a consistent EU spectrum system?

Do you think that cross-border businesses will shell out for cloud computing, videoconferencing, 3D printing, if they have to run on slow and insecure connections?

Do you think businesses will prosper without a competitive choice of tailored services?

In an economy based on connectivity, will cross-border businesses continue to want multiple contracts with separate suppliers in different countries, without any guarantees of quality, security and speed between them?

Does Europe stand a chance in those new digital markets, either supplying or demanding, if we continue as we are: fragmented, disjointed, subscale?

This proposal is good for the telecoms sector. Even those who can't see further than their own nose.

But this goes beyond one sector.

We need to regain leadership across the digital ecosystem, from app designers to handset makers.

Countless businesses operate across the single market: now they need the communications to match.

And we all need the economic boost of a competitive telecoms single market: worth 110 billion euros a year.

Telecoms networks are essential infrastructure. And becoming more so.

When we debate energy, it's not just the energy sector who are involved. When we debate transport, it's not just the transport sector.

So ask yourself who your members actually are. I'll bet those who provide telecoms infrastructure are far outnumbered by those who use it. Use it every day for all sorts of business functions. So make sure you're representing them too.

Some say we are moving too fast. I must say it's pretty rare - and pretty refreshing - when anyone accuses the EU of moving too fast.

In fact I take it as a compliment. Because look out there: the world is moving fast too. We need to keep up.

And to those who say we haven't consulted enough. Well, in fact there are many studies that have asked businesses what they want from the communications market.

What do they say?

Businesses say they want innovative tailored services, a competitive choice of providers, and reliable fast broadband.

They don't say they want to carry on paying vast roaming bills, I can assure you.

If you want a discussion, okay: let's have it now. Tell me what kind of connectivity market you need to support your business. I'm listening. But let's not use that as an excuse for inaction.

Next week EU leaders face that decision to create a connected continent. I hope they make the right decision: for the sake of every company, every citizen, and our whole competitiveness. And I hope you can join with me, in a partnership for a digital Europe: a continent ready to face the future.