Setting the direction of our digital future - what Europe needs to get right

By Joakim Reiter, External Affairs Director, Vodafone Group

Vodafone sets out policy recommendations that could chart the course for Europe to become a global leader in the digital revolution

Despite a daily drumbeat of news heralding the transformative impact of digitalization, Europe’s track record on achieving ubiquitous connectivity and deploying new technologies is - to date -not compelling.

Joakim Reiter, external affairs director, Vodafone Group

While benefitting immensely from the internet revolution so far, Europe has ended up a laggard while competitors from the US and, lately, China lead the way. But simply emulating our US or Chinese counterparts in the future will not be enough.

We must become the very architects of our own digital destiny if we want to protect and build on the European social market economy model in a digital age. Despite the significant progress driven by the EU's Digital Single Market, we need a step change: turbo-charging investments in top-class European digital infrastructure, creating better conditions for digital solutions made in Europe and building trust in the digital society that empowers European citizens.

The foundations for digital infrastructure

We will only get faster, more reliable and more secure connections by boosting investment in Gigabit networks. Far too many European consumers and businesses still suffer from low speeds and poor capacity on fixed networks.

5G may have launched, but Europe is still struggling to reach all its citizens with 4G mobile connections, while China and the US move ahead decisively. Although European operators invest more than their US peers, the return on those investments is far lower in Europe, leaving much less capital to redeploy into upgrading the quality of networks. As a result, for both fixed and mobile networks, Europe faces a massive investment gap.

To achieve the necessary step-change, governments and industry must work much more closely together to create better regulatory conditions that incentivize investment in infrastructure, underpinned by policies that ensure sustainable competition.

For mobile, it starts with spectrum. Auctions and fees should be designed to achieve long-term connectivity targets, rather than to meet short-term budget considerations or to discriminate in the interests of individual market players.

Governments should also tackle the red tape that slows down the rollout of fixed and mobile infrastructure and increases its cost. Investments should be allocated more efficiently — including through network-sharing — to increase coverage, and we should promote both greater energy efficiency and lower greenhouse gas emissions from our next-generation networks.

In all this, the European Commission must take a much stronger role in ensuring consistency.

Positioned to succeed in a digital age

New policies are needed to help businesses both large and small embrace digitalization, ensuring that innovative services can emerge in a fair and competitive market that encompasses all of Europe.

Far too often, Europe devises policies with too much focus on determining the actions of our companies, even in the market exploratory phase. To succeed in the global innovative race, we must shift our approach from “innovation by permission” to “innovation first.”

Europe must resist over-regulation and find a balance between economic and social policies to accelerate the new technologies that could make it a global leader: the Internet of Things, artificial intelligence and 5G. The focus should be on encouraging business to invest and innovate, while setting the direction and establishing broad principles — not detailed rules — for the behaviour it expects from market players.

Businesses could be incentivized, for example, to take an ethical and human-centric approach to AI. Further growth could be unlocked by developing targeted policy measures that facilitate commercial sharing of non-personal data, building a vast Europe-wide data pool. Similarly, if a player does hold significant market power or the position of digital gatekeeper, we need more effective competition enforcement as well as ex ante “rules of engagement” that preserve fair commercial practices.

Above all, Europe needs to have the confidence to replicate its past success in creating a truly integrated internal market with harmonized rules and common standards.

A priority should be “smart things.” It is estimated that the use of IoT in Europe will increase almost three-fold between 2017 and 2025, reaching 4.9 billion connected devices. This is an area that plays to Europe’s strengths as a modern and competitive manufacturing industry and one of the world’s largest goods markets.

To capture this opportunity, Europe must establish a fit-for-the-future regulatory framework designed for IoT. This does not exist today. It is not credible to take legacy rules designed for telephone voice calls between people and retrofit them for the world of communications between machines. Technology neutrality is key to getting the new rules and standards right while ensuring consumers are genuinely protected.

A system we can all trust

Digital transformation is not an end in itself, but a key enabler for a society where people can feel protected, cared for and empowered. This is also an essential step to put Europe in position to become a digital leader that reflects the values it cherishes.

Without the trust of our citizens and customers, we will not see a positive transformative impact from new digital services or the digital technologies that support them. When new digital products and services are launched they can fall between regulatory cracks. This unfairly tilts competitive conditions between market players and leaves consumers unprotected. As technology advances, we need smarter, more principles-based consumer protection legislation that applies the same rules across the European digital ecosystem.

A world in which everyone and everything is connected also brings greater vulnerabilities and added challenges for individuals and society. Disinformation, election-meddling and cyber-attacks threaten our values and our way of life. We require security by design, not as an afterthought. We must give priority to the resilience of the digital networks and digital services we depend on. All participants in the digital ecosystem must collectively and collaboratively raise their game and accept that security will require investment.

The EU’s next strategic agenda, spanning 2019 to 2024, will be pivotal. Vodafone’s white paper, “Connecting Europe for a Better Future”, proposes policy recommendations that will ensure Europe is positioned to be a global leader in the next phase of the digital revolution.

This article originally appeared as sponsored content in Politico on 4 September 2019.