Subscribe For Free

Innovation in next-gen telecoms must be prioritised over regulation says Ericsson chief.

Staff Reporter
March 28, 2024

Europe will become a footnote in next-generation technology success stories unless innovation is prioritised over regulation warned Ericsson President and CEO, Börje Ekholm this week (Pic Raul Mee. Courtesy NIB.

Speaking at a seminar at the Nordic Investment Bank’s Board of Governors Ekholm said putting telecoms regulation over innovation coupled with the fragmented nature of the European communications service provider market is inhibiting the region’s ability to embrace new digital technology and economies at the same rate as regions such as China, the U.S. and India.

European providers are not making returns to cover their cost of capital

The majority of European providers are not making returns to cover their cost of capital this continued approach could see Europe lacking in digital technology, innovation and industrial leadership on the global stage.

Citing AI innovation as an example, he said the EU has attracted just four percent of AI funding, compared to more than 80 percent for the U.S. and China.

An open attitude to embracing digitalisation had enabled the U.S. and China to capitalise on the capabilities of 4G. This created many new companies that are now in the Fortune 500 while European representation on the list has dropped.

Investment in digital infrastructure in Europe is less than half of that in the USA.

Ekholm said average investment in digital infrastructure in Europe is currently less than half of that in the USA.

We need to take this seriously.Technology disruption creates new market realities and changes competition. It is the ability to reinvent and innovate that is critical.”

Fragmentation in the European telecoms market, meant providers are disadvantaged in competitive scale when compared to the U.S., China and India.

For an operator, scale matters, and European operators are subcritical in scale. The average number of subscribers per operator in Europe is 4.4 million – compared to 95 million in the US, 300 million in India and 400 million in China. Europe simply needs in-market consolidation.”

To compete on technology leadership, Ekholm said Europe must prioritise innovation over regulation.

This is about Europe’s ability to create jobs and achieve economic prosperity. Digitalization is only going to accelerate. Building out ubiquitous, high performance, digital infrastructure is the key to Europe´s future competitiveness, technology leadership and decarbonization ambitions. European policy makers have an essential role in making this possible.”


Share this article