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Europe Is Strangling the Telecom Industry: CEO

Pedestrians pass a France Telecom shop in central Paris
Alastair Miller | Bloomberg via Getty Images
Pedestrians pass a France Telecom shop in central Paris

The regulatory framework for European telecommunication providers needs to change totally if Europe is to keep up with the U.S. in promoting faster wireless data networks, according to France Telecom-Orange CEO, Stephane Richard.

Speaking to CNBC at the Mobile World Congress in Barcelona,Richard said 2013 will see the deployment of high-speed broadband services across the continent, including 4G services and the roll out of FTTH (fibre-to-the-home) programs.

If telecommunication companies want to provide such services, Richard claimed, the regulatory framework needs to fall.

"Regulation in the past 15 years has led towards a single purpose," Richard said, "which is to provide a short-term benefit for the consumer.That's it. Today, this continent realizes that the industry is weak, that the main operators are in weak positions, the markets don't like them, and they are still indebted."

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"At the same time we need a lot of money and resources to provide connectivity to Europe. Everyone wants Europe to be a connected-continent for the future," he added.

With around 140 operators in Europe – compared to just four in the USA and three in China – Richard said regulators should stop increasing the number of competitors in the market.

He also called on a more "sensible" approach to pressing issues and a focus on investment.

"They should be sensible in the way they are selling spectrum," Richard said. "They should be sensible in the way they levy taxes. They should provide incentives and plans in order to help the industry to invest in the network. Now, we have to think in terms of financing investments in the networks in a joint initiative by private operators and governments."

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Richard's comments come after the European Telecommunications Network Operators' Association, which represents 37 carriers, announced it will ask the European Commission to allow more mergers across the continent.

Richard's attack on the regulatory framework was echoed by Ren Obermann, the CEO of Deutsche Telekom, although his German counterpart was more optimistic about changes occurring sooner rather than later.

While Obermann said the European Commission had led a "wrong regulatory regime" that was unfriendly towards investors for many years, Neelie Kroes, the European Commissioner for Digital Agenda, was a welcome change.

"She sees that this regulatory regime is not going to lead anywhere,"Obermann told CNBC. "The digital agenda for Europe is not going to happen unless she makes changes, and she is willing to make those changes. She has announced a very good agenda for the years to come and I hope that this gets translated fast into the national regulatory regimes."

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