Posts tagged ‘European Commissioner Neelie Kroes’

Kroes-aid for a Connected Continent

Invest, Innovate and Compete (and growth will come organically)

imageTimes are challenging in Europe. And for some it is tempting to use a wide brush to paint a dark picture for the whole continent. While there are difficulties for some players in the ICT arena, it is too early to draw comparisons to a Lehman Brothers-style collapse for the sector. It’s no coincidence that companies peddling negative messages are the ones with negative or flat growth. But it’s not just a “can’t do” attitude that is holding some in the sector back. The debate kick started by Vice President Neelie Kroes’ “Connected Continent”, pro- posed EU telecoms legislation, represents an opportunity to get Europe back on track.

28 Elephants, 28 Rooms

Judging from the importance that governments across the globe give broadband policy, Commissioner Kroes is right to be pushing the broadband envelope. She also makes an important link between investment and performance. But to invest, you need a good investment environment where risk levels are not aggravated by significant variations in the market that Europe is still trying to turn into a single one. One cannot ignore the differences in Europe among member states – it remains the
proverbial elephant in the room for both the business and political community. And it’s a big enough elephant that it got a mention in European Commission President Barroso’s State of the Union address. He asked a poignant question, “Isn’t it a paradox that we have an internal market for goods but when it comes to digital market we have 28 national markets?”

The F Word

The European Parliament who will be combing through Neelie Kroes’ proposals along with the European Council which brings together relevant ministers from Europe’s 28 members (which the Commissioner recently referred to as “28 ring-fenced telco markets”). Breaking up Kroes’ proposed package into pieces – an – other kind of equally unwanted fragmentation – brings with it significant risks in urgent times, as the Commissioner warned the European Parliament (its first reading is expected to take place in March 2014).

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Be Careful What You Wish For (You just might like it)

The only people who don’t change their minds are those in insane asylums or cemeteries, said Everett Dirksen, an American politician. 2012 was marked by a fundamental development in thinking amongst European Union leadership that was hailed by the wider telecoms sector as not only a capital market conscious move but one of anticipated stability after a decade of what one cable CEO termed a “decade of price erosion for the telecoms sector.” It may not have seemed immediately obvious why an announcement on enhancing the broadband investment environment was such a big moment.

Evidence based decision making
Vice President Neelie Kroes said, “After examining all the evidence, and given the significant competitive relationship between copper and NGA networks, we are not convinced that a phased decrease in copper prices would spur NGA investment.” The European Commissioner for all things technology continued, “We now see fibre investment progressing relatively well in some Member States where copper prices are around or above the EU average.” Cable industry execs would be quick to agree, citing the crucial element that fibre plays in the Hybrid Fibre Cable (HFC) networks that help garner the cable’s reputation for speed-based performance.

The benefits of doubt
But there must have been a healthy amount of doubt about the wider effects of price intervention. Having consulted far and wide with the very industry building Europe’s communications networks of tomorrow, Vice President Neelie Kroes finally settled on a policy solution, something that many market players would characterize as reassuring.

Regulation 2.0
Markets aside (which rebounded on news of the decision), political thinking beyond the Berlaymont recognizes the need to re-assess – even recast – regulation. A thought piece put out in a personal capacity by Georg Serentschy furthers the discussion of what he calls “Regulation 2.0.” The CEO of Austrian national regulatory authority RTR and 2012 head of BEREC, the grouping of European telecom regulators, majors on what some have termed a “paradigm shift” in regulatory thinking by Commissioner Kroes.

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Interview with Matthias Kurth

In the run-up to Cable Congress 2013 we speak to Matthias Kurth of Cable Europe.

Matthias Kurth Executive Chairman Cable Europe at Cable CongressMatthias joined the organisation as Executive Chairman last October and sits on Cable Europe’s Executive Committee, which has oversight of the cable industry’s main representational duties in Europe. He previously held the position of President of BNetzA* and left behind notable achievements with respect to competition in the telecommunications market.

What stand out as some of cable’s priorities as we look at the state of the industry in 2013?

I have been talking a lot about the consumer since arriving here at Cable Europe, but that’s nothing new for me. Having previously worked as President of BnetzA*, I once called it Europe’s largest consumer protection organization. Having a healthy focus on who we are working for is vital in a business where our direct business relationship with customers is certainly coveted.

So what does the consumer want? The answer to that reveals cable’s priorities. The top priority is not to keep up but to keep ahead of what consumers want. How do we do that? By having the best infrastructure that delivers the best content out there. Consumers don’t really care about what the infrastructure is until it doesn’t work. But they do care more and more about moving their premium content around devices seamlessly and with the sort of high speed cable customers have grown to expect.

So there you have it, we expect to continue upgrading speeds so that consumers have the best quality of service out there. Cable Europe’s members are offering 100Mbps across Europe but speed for speed’s sake isn’t interesting. What is interesting is the high quality experience consumers can have with our continually upgraded networks. We are proud of the contribution we make to Europe’s high quality infrastructure. And it keeps customers coming back for more which, of course, makes everyone happy.

Can you tell us a bit about the importance of investing in next generation broadband to keep these positive trends on track?

Investment and innovation go hand in hand, it’s as simple as that. Cable’s ultra fast broadband services are achieved by relentless re-investment in our networks. We invest, on average in Europe, around 20-25% of revenues annually. And when talking CAPEX, it is worth recalling that the expenditures are made with the goal of both adding value and creating future benefits – for both the consumer and our businesses. There is an element of risk for the investors who make careful decisions based on consumer demand and other vital market condition indicators.

Last year was a turning point where Cable Europe opened Cable Congress with a press briefing that shared the news of 7% top-line revenue growth across the industry. We attributed strong revenue and subscriber growth to a harvest from steady investments that have brought us to where we are today: providers of a great service over a super infrastructure. A recent European Commission report had some great feedback for us. It said that:

  • Cable networks account for the next largest contribution to standard broadband coverage
  • The most important coverage across Europe or fixed next-generation access (NGA) is from cable
  • Docsis 3 cable is the biggest contributor to rural NGA coverage (RNC)
  • Docsis 3 services over the cable networks make a very important contribution to the availability of NGA in the study countries
  • Cable networks make about the same contribution to rural coverage as WiMAX

So it would seem that our investments help bring us to the point of having an infrastructure that is recognized by the European Commission for its wider benefits.

One of Europe’s most prominent tech women recently reminded us of the fibre power in cable networks. European Commissioner Neelie Kroes tweeted a photo of a piece of fibre from Cable Europe on her desk. Tell us a bit about the fibre power in cable’s networks and why it matters to consumers in Europe.

Vice President Kroes has the mind of a board member. Neelie always seeks to better understand business. If you ever have had a meeting with her, you know what I am talking about. She understands the need to encourage investment given its link to innovation. There is an element of pushing for higher speeds in her plan called the Digital Agenda. And we’re already achieving important parts of the Digital Agenda. The numbers in a Solon report that we presented to her personally back this up:  95% of households in the reach of European cable networks will be able to subscribe to high speed internet services from cable in 2020.  By the end of 2013 nearly all cable operators will have upgraded to DOCSIS 3.0, enabling 100-200 Mbps speeds — and higher. With DOCSIS 3.0 rolled out, 100 Mbps speeds are already becoming the standard and cable is projected to offer 51% of EU households 100Mbps or more by 2013.

READ THE FULL INTERVIEW HERE

Together with Manuel Kohnstamm, President of Cable Europe, Matthias will welcome you to Cable Congress 2013, taking place on 5-7th March at The Lancaster in London.

View the latest conference agenda. With over 850 attendees from 35 countries, Cable Congress is the undisputed annual meeting place for the Who’s Who in the industry. This is where decisions are made, strategy for the year ahead is laid out and the cable industry chiefs gather for special event after special event.

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