The former president of Telephone César Alierta became popular in international forums for his steely diatribes to community regulations that demanded all kinds of regulation and controls, while leaving full freedom to new Internet companies such as Facebook or Google. His successor in office, José María Álvarez-Pallete, It has taken over from this doctrine and has today launched a harsh criticism of the European authorities, which it has accused of being responsible for its restrictive regulation that European telecommunications operators are becoming less profitable and that their value in Stock market has plummeted dramatically in recent years.
Pallete, who participated in FT ETNO Summit 2018 forum, organized by the newspaper Financial Times, called to put an end to what he called the EU "normative old regime" that submits to a suffocating regulation the telecommunications companies that are not subject to the Internet giants, the so-called Over The Top (OTT), such as Google , Facebook or Amazon.
The head of Telefónica blamed this regulatory framework to be responsible for the revenues of major European operators have fallen from 444,000 to 369,000 million dollars a year in the last five years, and the market capitalization of the top ten companies of the sector has plummeted 43% since 2012, from 234,000 to 133,000 million dollars.
Pallete stressed that while the telecommunications sector contributes 5% of European GDP, maintains 700,000 jobs and returns 23.2% of its income in taxes, the EU is committed to a hyperregulation that has caused prices to have fallen by 80% in the last 20 years, causing a narrowing of profit margins.
Loss of value
The director, who shared a forum with the European Commissioner for the Digital Economy, Mariya Gabriel, said that operators have to face investments to accommodate a 50% growth in data. "Do cars or iPads grow 50%"? he asked, while pointing out that the sector is losing weight in the industry from 49% in 2010 to 37% in 2016, while new Internet players have gone from 4% to 21% in the same period.
Pallete requested a simplification of the regulations, and a minor intervention in matters such as prices, merger processes, agreements between companies, and the application of the principle "same service, same rules and same obligations", in relation to the companies of Internet,
"We are still on time," stressed the Spanish director who demanded digital regulation for the 21st century that favors investment in new networks and grants long-term radio spectrum.