European Communications

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Everything Everywhere CEO: “We need to stop fighting each other”

Olaf Swantee, the CEO of UK-based operator JV Everything Everywhere, has called on operators to engage in more constructive dialogue.

Speaking at the launch of the DigiWorld Institute’s 2012 Yearbook in London on Monday, Swantee focused on the need to improve the UK’s infrastructure by way of example.

Everything Everywhere is currently on a very public mission to get 4G up and running in the UK.

The official 4G auction is not scheduled to happen until Q4, but EE is trying to persuade national regulator Ofcom to allow it to get on with offering LTE via the 1800MHz spectrum it already owns.

Rivals have contested this proposal.

Vodafone, for example, has said there is “overwhelming evidence that giving Everything Everywhere a head start could seriously undermine competition”.

Said Swantee: “Our industry has a tendency to use too much litigation. We need to stop fighting each other and support Ofcom to get 4G moving.”

He added that he had “no final timeline” from the regulator over the 1800Mhz idea but hoped competitors would not litigate against them.

The CEO outlined the frustrating situation in which the UK is behind the curve despite being “one of the world’s most sophisticated mobile data markets” and with an economy that is heavily dependent on its digital economy.

More widely, Swantee said operators "have a duty" to stop sweating their assets.

“Our infrastructure is not future proof – we can handle the data today but it will be very hard to do so in the next few years,” he said.

At the same time, OTT players continue to take a bigger part of the revenue “pie”, according to Swantee.

He called on operators to move to a more IT centric model of service provision and highlighted M2M and mobile advertising as two “clear areas of focus”.

In general, he said operators did not have “the same ability” as OTT players to provide software.

The CEO was speaking just days after his company’s owners, France Telecom and Deutsche Telekom, were reportedly in discussion with a private equity firm about a potential sale.

Mexico-based operator América Móvil has increased its stakes in Telekom Austria and is looking to buy Netherlands-based KPN as consolidation in Europe looks to be on the cards.

The DigiWorld Institute said the sector is reaching maturity.

Last year, the telecom, IT and TV markets maintained the same level of growth achieved in 2010, but are now lagging behind growth in global GDP to the tune of three percent.

“This is new – following pervious crises, such as in the 1990s and after the dot com bubble of 2001, the sector always bounced back with stronger growth level than the rest of the economy,” said Digiworld Institute UK vice president Jean-Michel Chapon.

“Today it is not recovering at the same pace as the world economy, which is the sign a mature sector.”

Aside from consolidation, there are several other implications for telcos, according to Chapon.

First, operators have to work out how to cash in on the wealth they are creating for other sectors such as e-health, automotive and e-government.

While the size of the European telecom services market fell 1.9 percent last year, new markets, such as cloud, M2M and gaming, are growing at 30, 17 and 25 percent respectively, according to DigiWorld figures.

Second, operators are having to do more with less as witnessed by the fact that, despite substantial investment, operators are seeing only a limited increase in service revenue from next generation broadband.

DigiWorld Institute CEO Yves Gassot said operators must accelerate changes in their business models if this is to change.

“If they don’t, the sector will become a dumb pipe,” he said.

Comments  

 
#1 2012-06-20 13:19
Agreed - the companies concerned should collaborate rather than litigate.

However, it is worth bearing in mind how much money was wasted a few years ago on overpriced bids for 3G licences which slowed the roll out of competitive services.

Possibly the criticism, at the launch of the yearbook on Monday evening, of 'too many lawyers' should be extended to include too many economists who dream up wierd auctions schemes and have no real concept of business?
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