Höttges’s frustrations about a stagnant European telecom industry hampered by low margins and high levels of competition were echoed by others on his panel. — AFP
European telecommunications executives gathered at the continent’s biggest trade show railed against over-regulation, blaming Brussels for preventing consolidation in the industry that’s fallen behind peers in the US and Asia.
"You know, what Europe needs is a DOGE,” Deutsche Telekom AG Chief Executive Officer Tim Höttges said Monday at the Mobile World Congress in Barcelona, referring to the Trump administration’s cost-cutting Department of Government Efficiency spearheaded by Elon Musk.
Höttges’s frustrations about a stagnant European telecom industry hampered by low margins and high levels of competition were echoed by others on his panel, including Vodafone CEO Margherita Della Valle, Orange SA boss Christel Heydemann and Telefonica SA’s Marc Murtra.
"In what has now become a global race, it is fair to say that Europe is not winning,” Della Valle said, adding that in "the 5G era, Europe is a laggard.”
Many in the industry see consolidation as a cure. In several European markets, regulators have blocked or heavily modified planned mergers that would reduce the number of operators in a country from four to three in an effort to maintain affordable service.
A report by former European Central Bank President Mario Draghi last year said the European Union should encourage more mergers in the sector. While Teresa Ribera, the bloc’s antitrust chief, has said she supports overhauling EU merger rules in general to boost competitiveness of local companies, the commission hasn’t yet pushed through any changes.
"We should just copy what the Americans are doing,” said Höttges, whose Deutsche Telekom gets most of its revenue and profit from a stake in US operator T-Mobile US Inc. "China has three operators, even India went to three operators and they are prospering.”
The panel came at the end of a day when the leaders of companies including Telefonica, Emirates Telecommunications Group Company PJSC, Telenor ASA, and Bharti Airtel Ltd expressed frustration that their companies haven’t got sufficient financial rewards from building expensive telecommunications networks.
Bharti Airtel chairman Sunil Bharti Mittal said the industry bears the burden of building digital infrastructure, but isn’t getting enough back.
"The return on capital? At 4% average,” Mittal said. "We may as well put the money in the bank and go and play some golf.” – Bloomberg
