Technology and trade will be the European Union's key tools for staying competition on the global stage in the next five years. Given the bloc's struggles in these areas, losing even one year here is akin to falling behind by ten in others.
To stay ahead, the EU must reshape its tech sector and digital infrastructure by attracting critical investments. This demands competition and innovation.
Advancements in telecommunications are – and will remain – essential for European competitiveness, economic growth, security and social wellbeing. In policy terms, this requires a stronger internal market and rules that empower industries to thrive. While deregulation may seem like an attractive option, it risks favouring a few dominant telecom operators at the expense of the broader market and consumers. At the same time, without reforms, we cannot expect any meaningful change.
The need for rapid investment
Money will be crucial. The EU must incentivise significant investments in secure and transformational 5G deployment to ensure fast, reliable and trusted networks. Fortunately, the EU is home to two global 5G leaders, Nokia and Ericsson. However, they can only do so much from the supply side.
On the demand side, the EU faces a considerable investment gap, with both B2B and retail struggling to keep pace with cutting-edge tech. Key sectors including manufacturing, healthcare and transportation have been slow to adopt 5G technologies, partly due to delays in the rollout. Although 5G now covers nearly 90 per cent of the EU's population, the coverage is uneven, creating a digital divide, especially between rural and urban areas. This divide, in turn, undermines the EU’s broader digital transformation goals.
Without robust demand-side investments in infrastructure, applications and incentives for end-users, deployment will continue to lag – particularly in rural areas where private investment is less attractive. Moreover, the EU faces fragmented regulations and weak public-private collaboration.
This is no way to compete with the United States and China.
Better regulation, not more
A unified strategy in spectrum allocation – the assignment of radio frequencies for wireless communication, which currently varies among EU member states – can reduce costs for operators by simplifying cross-border operations and creating economies of scale, leading to faster deployment times.
The EU also needs new rules – not more or fewer, but smarter and more strategic ones. Policymakers should move beyond mere guidelines to create a unified legal framework that compels member states to implement stringent, uniform security protocols across all aspects of digital infrastructure. This would build trust in the European tech ecosystem – a win-win for both the sector and consumers.
Finally, security is imperative. China’s dominance in global telecom supply chains raises concerns about dependency and security. Responding to these risks requires decisive action from both the European Commission and European Parliament.
The EU's 5G toolbox, which provides a common framework for assessing and mitigating security risks in 5G networks across member states, was a good start, but its measures must be strengthened to ensure compliance. Alternatively, the development of binding legislation could safeguard security at the EU level, providing it does not impede competition and risk monopolistic practices.
With 6G on the horizon, the EU must take the lead on technological performance and security, designing energy-efficient networks that meet the demands of a data-hungry society.
Looking for good (political) signals
The forthcoming Commission must prioritise a strategic roadmap for a competitive, secure and resilient telecommunications sector. Co-operation between operators and policymakers is critical.
Legislation must foster innovation and fair competition by balancing market growth and regulation, ensuring laws are neither too restrictive, which stifles innovation, nor too lenient, which allows monopolistic practices. Achieving this balance supports both technological advancement and consumer protection.
There is no magic wand, but the next political cycle must embrace adaptive telecommunications legislation – a flexible regulatory framework that can swiftly respond to technological advancements like 6G, while ensuring that regulations remain relevant and effective.
Innovation brings disruption. If the EU wants to compete in the tech space globally – a do-or-die must in the eyes of the Draghi report – it needs to make sure its telecommunications sector is ready for it.