Shaping the EU’s telecoms landscape in 2025

The next 12 months promise to be a lively for the EU telecom’s landscape with the anticipated review of the European Electronic Communications Code (“EECC”) and a proposal for a Digital Networks Act (“DNA”). In this context, it remains to be seen if the telecoms recommendations from the Draghi report, published in September 2024, will be implemented. The report encourages greater consolidation and movement towards a single EU-wide telecoms market.

In December 2024, the European Council (“Council”) published its response to the European Commission’s White Paper “How to master Europe’s digital infrastructure needs?”, in order to inform the potential policy developments.  In its response, the Council outlines several conclusions which aim to steer the forthcoming proposals, and which emphasise regulatory consistency, effective competition and cybersecurity with respect to digital infrastructure (see link). 

The White Paper outlines several key challenges facing the EU telecoms market and digital landscape, including:

• the increasing complexity of technology resulting in greater associated capacities for data processing, storage and transmission;
• continued investment into the EU telecoms sector;
• ensuring a level playing field between cloud and telecoms providers regarding the EU regulatory framework;
• the need to strengthen security and resilience across infrastructure; and
• the regulation, innovation and investment into the sector needed to drive sustainability initiatives.

In addressing these challenges, we consider the Council’s responses to the White Paper, which aim to position the EU as a leader in the global digital economy and to ensure that its digital infrastructure can meet the demands of the future.

Investment and innovation

The Council’s response:

• acknowledges the transformative effects of digital convergence (the integration of different digital services and platforms) on various sectors;
• underscores the necessity for substantial private sector investments to achieve the ambitious targets set under the Digital Decade Policy Programme 2030;
• supports proposals to review the relevant financial instruments in place for digital infrastructure, with a view to improving co-ordination between funding programmes and achieving the blending of funds where appropriate;
• highlights that such funding instruments and programmes should account for the increasing capability and uptake of AI, alongside recognising that transforming the EU’s connectivity industry will require significant investment capacities;
• acknowledges that copper switch-off could be gradually realised to support the roll out of very high-capacity networks and achieve the Digital Decade targets; and
• notes the need to further digitalise the industry to incentivise the take-up of advanced technologies and stresses that the availability of high quality, affordable, reliable, sustainable, accessible, open, secure and trusted connectivity is of paramount importance to EU citizens and businesses.

Regulatory framework

The Council’s response:

• stresses the importance of net neutrality and of a functioning internet ecosystem, and that contractual freedom should be upheld, whilst keeping regulatory intervention at a minimum;
• states that regulation of the electronic communications sector should proportionately address both supply and demand, including the affordability, freedom of choice, security, and quality of the services to consumers and businesses through, inter alia, competition;
• calls upon the Commission to further investigate means to stimulate demand for cutting-edge digital networks and services, and to enable innovative and sustainable business models for the benefit of EU consumers as well as businesses (including for mobile operators), with a view to improving cross-border connectivity;
• highlights that principles of subsidiarity, proportionality and technological neutrality should be reflected in all electronic communications initiatives;
• calls for a review of the ePrivacy framework to reflect technological developments and ensure the confidentiality of electronic communications, noting that the implementation of a consistent privacy framework is crucial;
• in acknowledging that the market segments of connectivity and computing are converging, the response recognises that a level playing field between the two may be in the interests of the EU to promote effective competition;
• welcomes proposals to simplify the EU’s fragmented regulatory environment for the provision of electronic communications networks and services. It notes that the “country of origin principle”, where providers could theoretically operate across the EU by complying with the requirements in the Member State of main establishment (as opposed the current general authorisation regime and regulation in each Member State where services are provided), requires further, detailed analysis. Risks of this approach, including forum shopping and law enforcement issues, are also discussed;
• emphasises that the possibility for ex-ante control on specific markets should be maintained;
• makes high-level comments regarding potential market consolidation, including commentary that authorised consolidation could create economies of scale in the EU and generate further opportunities, such consolidation being subject to competition assessment;
• acknowledges the significance of legal certainty and implementing the adopted legislative acts, including but not limited to the EECC and the Gigabit Infrastructure Act; and
• underscores that that any future regulatory measures to foster the development of the Digital Single Market should also aim to promote connectivity and innovation, foster competition and contribute to consumer welfare, whilst ensuring a high level of cyber-resilience and cybersecurity.

Security

The Council’s response:

• places strong emphasis on a co-ordinated effort at the European and international level to take steps to guarantee the security of digital information, both generally and in the post-quantum cryptography era, calling for a long term strategy; and
• highlights submarine cable infrastructure security and resilience as a critical consideration for Member States.

Sustainability

The Council’s response:

• highlights that widening the scope of EU taxonomy for green investment in electronic communications could operate to incentivise investments into more sustainable networks; and
• emphasises that fibre rollout should be accompanied by other strategies to align with climate targets

Telecoms and connectivity underpin the digital economy. As we look ahead to 2025, the European Commission’s Executive Vice President for Tech Sovereignty, Security and Democracy, Henna Virkkunen, certainly has much to consider in shaping the EU digital landscape and connectivity ambitions. The Council’s conclusions provide a helpful steer as the Commission works towards delivering Europe’s 2030 Digital Decade targets, as well informing the design of the Digital Networks Act (which aims to help boost secure high-speed connectivity) and the review of the EECC (which underpins the EU telecoms regulatory framework).