A Simplification Agenda for European Telecoms

Executive Summary

The European digital economy is at a turning point. The ability of citizens and economies to innovate, improve productivity, and create more opportunities for sustainable growth relies on significantly upgrading the digital infrastructure. As citizens and businesses demand high-performance and resilient connectivity, Europe’s telecom regulation must evolve in line with the ambitions. This study specifically f cuses on regulation impacting the customer journey, highlighting some key policy adaptations to restore the overall competitiveness of the EU and digital ambitions in the telecom sector, while safeguarding end-user protection.

The targets for the Digital Decade — complemented by the ambitions laid out in reports by Enrico Letta, Mario Draghi, and in the more recent “Competitiveness Compass” of the EU Commission — are aimed to drive the EU toward a new era of innovation and competitiveness and are based on four pillars: (1) digital skills, (2) developing secure digital infrastructures, (3) digitizing business, and (4) transforming public services. Advanced connectivity networks and services are at the center of this policy framework, and they will be essential to the achievement of the related goals.

Telecom operators play a central role in enabling digital participation by providing reliable, secure, and affordable connectivity to millions of citizens and businesses. Over time, European consumers have benefited from tremendous value creation delivered by and enabled by telecom operators through greater service access, unlimited usage, much faster (x10) speeds, and quality and richer TV and entertainment options.

However, European telecom operators are experiencing the lowest growth among digital players despite relatively higher investment (CAPEX) and value given to the sector. Compared to global peers — particularly in North America and Asia — European telecom operators have underperformed across key performance metrics. Revenue growth of European telecom operators has, for instance, been flat from 2014 till 2023, while other markets grew their revenue >3% per annum (p.a.).

Furthermore, the market capitalization of non-European telecom operators grew by 1%-2% p.a., while the European telecom operators’ market cap declined by almost 2% p.a.

Today’s regulatory framework, built up over decades through both horizontal and sector-specific legislation, in many aspects is no longer fit for purpose, considering the dynamic and increasingly digital ecosystem as well as the telecom sector’s high level of maturity. While regulatory simplification is required in many areas, this study offers a concrete simplification agenda for rules affecting the customer journey and security regulation.

Telecom operators are subject to a complex mix of over 28 European horizontal and sector-specific regulations (notwithstanding national laws), with nearly half overlapping — see Figure 1.

Telecom providers must comply with a patchwork of 34 sets of regulatory obligations that affect the whole end-user journey (see Figure 2) — from customer acquisition to service delivery and, ultimately, disconnection.

This results in complex, redundant information requirements; inconsistent rights across Member States; and constraints on offering innovative or tailored services — especially in fast-evolving areas like 5G and cross-border services — affecting both the way digital connectivity services are delivered and how they are ultimately experienced. This report explores why reform is urgently needed to support a more competitive, simplified, and harmonized framework for EU telecoms, while maintaining a high level of consumer protection.

Based on the operational burden created for telecom operators and their value to end users, the report identifies nine high-impact regulatory dimensions that require review due to their impact on the end user (see Table 1).

From the deep-dive analyses, several examples illustrate how current regulation consolidates into the undermining of the initial customer protection regulation ambition as well as unbalanced extra costs for telcos, due to three core structural challenges:

1. Overregulation. Redundant, outdated, and overlapping horizontal and sector-specific obligations reduce transparency and clarity for consumers while increasing costs for telecom operators. It can lead to inconsistency (e.g., notifications and confusion during data breaches) or additional rules being imposed to protect customers but ultimately creates confusion (e.g., contract information overload due to multiple transparency requirements).

2. An uneven playing field with big tech. Functionally equivalent services face different obligations and consumer protection experience depending on who delivers them — telecom operators or big tech. Different customer protection regulations on similar services provided by different players might leave consumers without the expected protections (e.g., provider switching).

3. Fragmentation among European countries. National variations of EU directives result in inconsistent consumer rights and experience across Member States leading to different rights and service levels for consumers depending on their location, ultimately undermining the single market.

To support Europe’s strategic objectives under the Digital Decade, to achieve European competitiveness and a single market, this report proposes a reform package structured around three priorities:

1. SIMPLIFY & ALIGN REGULATIONS TO REFLECT MODERN CONSUMER NEEDS 

• Streamline overlapping obligations by relying on horizontal consumer protection rules (e.g., GDPR, CRD) instead of duplicative sector-specific ones.
• Focus contract rules on information that enables meaningful comparisons, not technical details.
• Eliminate sector-specific data protection rules by repealing the ePrivacy Directive and consolidating the principle of confidentiality
  of communications, as the only remaining sector-specific element, under harmonizing legislation (e.g., GDPR or DNA).
• Abolish outdated USOs and replace them with targeted public support (e.g., broadband vouchers).
• Exclude B2B offers from consumer protection obligations under the EECC, recognizing their distinct nature and needs.
   

2. ENSURE A LEVEL PLAYING FIELD ACROSS EQUIVALENT SERVICES 

• Extend key obligations, such as switching rights and confidentiality of communications, to other digital providers offering functionally
  equivalent services.
• Clarify net neutrality to enable innovation:
• Allow a more flexible framework, in line with pro-innovation regulators (i.e., Ofcom).
• Create a whitelist of permitted specialized services to offer legal certainty.
• Reflect the broader digital value chain, ensuring that obligations apply fairly to all key actors like operating systems for an even consumer experience across digital value chain and players.

3. HARMONIZE IMPLEMENTATION & REDUCE FRAGMENTATION ACROSS THE EU 

• Use a regulation rather than a directive to ensure consistent application of customer protection rules across Member States
  and avoid national gold-plating.
• Strengthen EU-level coordination and institutional support to align enforcement practices and reduce divergence and additional
  obligations by Member States.
• Accelerate and streamline the enforcement of harmonized rules to support consistent consumer experiences and efficient cross-border services.

Europe’s telecom regulatory framework has helped deliver connectivity, protection, and competition. Telecom markets have fiercely evolved since their entry into force. It is therefore time to reassess the patchwork of rules applying to operators to improve harmonization and simplify them wherever possible to ensure they are future-proofed and innovation- enabling, while delivering consistent rights to users across the EU.