How Belgian telcos can navigate the Digital Single Market challenges

4. Complicated market consolidation
Demand uncertainties, high investments, and regulatory burdens drive market consolidation, affecting competition and innovation. Recent mergers highlight this trend. The EU wants to see fewer but stronger telecom companies. However, the efficiency and cost savings they are aiming for will not be as substantial as they hope because most operators use different core networks and because building new fiber-optic networks is a lengthy process.
 

5. Demanding broadband access and adoption
Economic factors such as inflation and government regulations influence broadband affordability and accessibility. Initiatives like the Electronic Communications Code Directive and the Universal Service Obligations aim to improve connectivity and broadband adoption, but they put a heavy financial burden on the telecom industry. Additionally, the average revenue per user in the EU is lower compared to that in the US, which makes it difficult for telcos to attract private investments.
 

Potential strategies

First and foremost, it is up to the EU government to continuously adjust their policies to facilitate market entry, encourage innovation, and guarantee fair competition. This should alleviate some of the financial strain for telcos.

Several regulatory reforms can be considered:

• The Universal Service Obligations (USO) framework should undergo significant reforms to alleviate financial strain on the telecommunications sector and help them enhance and expand connectivity.
  
  
• In light of the Fair Share Debate, the EU needs to further adapt their Digital Services Act and their Digital Markets Act to ensure that digital platforms like Facebook and Google contribute to network infrastructure costs and align data and consumer protection laws with those imposed on telecom operators.
  
  
• The administrative processes for market consolidation in Europe are a hindering factor for telcos. They need to be streamlined to support mergers and acquisitions.
   

In turn, telcos do well to adapt to the challenges they face by:

Continuing investments in infrastructure and technology
Telcos should continue investing in sustainable and high-capacity infrastructure like FTTP and 5G. Despite the high CAPEX, these investments are crucial for long-term growth and maintaining competitiveness.
 

Encouraging adoption of new technologies
Seeing as companies cannot keep up with technological advancements like 5G, it is up to telcos to help them identify use cases and to overall improve consumer awareness of future technologies.
 

Focusing on improving service quality
A focus on improving service quality and customer experience is essential to increase Average Revenue Per User (ARPU). This could involve decoupling into new business models like NetCo, ServCo, TowerCo, and FiberCo to optimize operations and deliver superior services.
 

Collaborating with industry stakeholders
Collaboration with other ecosystem players and hyperscalers can help to address industry-wide challenges. Leveraging their technologies and platforms helps telcos with their own service delivery.
 

In conclusion, Belgium's telecom sector faces significant challenges within the EU's Digital Single Market. Addressing these through strategic investments, lobbying regulatory reforms, encouraging technology adoption, and collaboration with other ecosystem players will be crucial for fostering growth and ensuring competitive advantage.