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Ericsson’s chief executive said the focus on regulation was “driving Europe into irrelevance”, warned that the region’s competitiveness was being undermined and called for changes to antitrust policy.
Börje Ekholm, head of the Swedish telecommunications equipment maker, said in an interview with the Financial Times that the continent had “fallen behind on a number of parameters” and digital infrastructure was at risk.
He said the focus on regulation was “driving Europe to last place”. [and] is driving Europe into insignificance,” which is why he believed it was “on its way to becoming a museum—great food, great architecture, great scenery.” [and] great wine, but no industry left”.
Last week, French President Emmanuel Macron also warned that the EU faces a “lethal” threat, and Nicolai Tangen, chief executive of the Norwegian oil fund, said Europe was more regulated and risk-averse than the US.
Former Italian Prime Minister Enrico Letta, tasked by European leaders with assessing the state of the European Union’s underperforming single market, also said earlier this month that the bloc must integrate its telecommunications, financial and energy markets or else there is a risk of losing their “economic security”.
Executives across Europe’s telecoms sector have called on regulators to approve mergers and adjust regulation to allow companies to scale up and get support to invest in the rollout of 5G and full-fiber networks.
“Why not allow market consolidation?” asked Ekholm. He added that there should be a time limit on antitrust reviews, saying the lengthy process could lead to companies not investing.
The European Commission in February approved the creation of a joint venture between mobile operators Orange and MasMovil in Spain on condition, among other things, of selling spectrum to Digi, which would allow the company to build its own mobile network, after concerns were raised that the merger could lead to price increases and undermine competition.
When asked about the hurdle of allowing higher consolidation prices in this sector, Ekholm said: “I think Europe is in a catastrophic situation. . .[some politicians]are concerned that prices would rise in the short term, But [it is] which threatens the long-term competitiveness of the continent.”
He added that Europe “has not grown as fast as the rest of the world because we lack the technology sector and the digital sector.” Ekholm said he was also concerned that jobs would be created “elsewhere where the new applications are actually being built.”
Another concern of the Ericsson boss was that the continent would fall behind in standalone high-speed connectivity 5G.
Population-wide standalone 5G coverage in Europe would generate over €100 billion in economic value by 2030, according to a new report commissioned by Ericsson from consultancy Analysys Mason.
The study predicted a shortfall of €28.2 billion in commercial investment needed to achieve this level of mid-band spectrum coverage in 30 European countries – which could be used for everything from autonomous tractors to the delivery of Medication through drones.
Ericsson reported earlier this month that net sales fell 15 percent in the first quarter compared to a year earlier. Competitor Nokia also reported a 20 percent decline in net sales in the first quarter in April compared to the same period last year, which it said was due to “persistent market weakness”.
Both have also previously announced job cuts and cost-saving programs.
“Maybe I should just move on and forget about the museum, but I was born in Sweden. . . I believe that Europe has real value in the world, but I want Europe to be competitive,” Ekholm added.