2 min

The head of Telecom Italia says the European telcos are facing a “perfect storm” of challenges.

Telecom Italia (TIM) CEO Pietro Labriola raised eyebrows this week while delivering his keynote address at the Mobile World Congress (MWC) in Barcelona. “We are facing a perfect storm,” said the chief exec, as he ticked off a series of “unsustainable” market trends such as falling retail prices, increased data consumption and the need for “unprecedented” investments to upgrade the continent’s data networks.

The latter concern refers to the massive investments needed to enable the deployment of high speed 5G broadband across Europe. This topic has generated a lot of controversy in recent weeks as the telecoms companies like TIM are pushing to force Big Tech firms such as Microsoft, Google, Amazon and Netflix to pay their “fair share” of the costs of the rollout.

The big digital providers are protesting, however, saying that forcing them to pay for the infrastructure build-out would be tantamount to an “Internet tax” and thus contrary to EU rules.

Political gamesmanship

Labriola’s comments were no doubt intended to cause a stir just as the European Commission has announced a 12-week consultation to examine the matter of who will bear the burden of the 5G investments, and how much.

Labriola called for the creation of a level playing field with digital providers, which the telcos claim suck up half of all data traffic in the EU. He also wants more openness to consolidation, and sought some accommodation about an industry requirement to switch off legacy systems before they can be fully monetised.

“Time to be brave”

“We are talking about metaverse but in Italy we have 40,000 payphones I cannot switch off”, Labriola pointed out. I have to pay for universal services. You talk to me about the metaverse when I’m still waiting to be repaid about €50 million for the payphone,” he complained.

Labriola also said that the industry needs to consolidate itself. Currently, more than 120 companies compete for customers in Europe, many more than in other large markets such as Brazil, USA and China.

In any case, he said in closing, the time to act is now. “Inaction is not an option” he declared, “it’s time for more than words – we need facts and bold decisions. It’s time to be brave”.