European telcos are well placed to fund needed investment in digital infrastructure

This paper by Benoit Felten, Robert Kenny & William Webb assesses the validity of the recurring European narrative of a suffering telecom sector. This narrative has been context for the discussions the European Commission has initiated regarding its upcoming Digital Networks Act (DNA), and the radical policy changes proposed appear to be designed in response.

The paper considers: whether Europe is lagging in digitial infrastructure; the financial prospects of European telcos; whether traffic growth is likely to create a need for material future capex; the perspective of investors in telcos; and policy implications.

It finds that the financial condition of European telcos is improving, and that capex is likely to fall as major network deployments complete and traffic growth continues to fall. While there are challenges in certain member states, they are not systemic. This suggests any changes in policy should be national rather than EU-wide.