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The chief executive of Ericsson said a focus on regulation was “driving Europe to irrelevance” as he warned that the region’s competitiveness was being undermined and called for changes to antitrust policy.
Börje Ekholm, head of the Swedish telecoms equipment maker, said in an interview with the Financial Times that the continent was “falling behind in a number of parameters” with digital infrastructure at risk.
He said the focus on regulation “is driving Europe to last place [and] is driving Europe to irrelevance” which was why he believed it was “on the 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 was facing a “mortal” threat and Nicolai Tangen, chief executive of Norway’s oil fund, said Europe was more regulated and risk-averse than the US.
Former Italian prime minister Enrico Letta, who was tasked by European leaders to assess the state of the European Union’s underperforming single market, earlier this month also said the bloc must integrate its telecoms, financial and energy markets or face losing its “economic security”.
Executives across the European telecoms sector have been calling on regulators to approve tie-ups and adapt regulation to enable companies to increase scale and gain support for investment in the rollout of 5G and full-fibre networks.
“Why not allow in-market consolidation?” Ekholm asked. He added there should be a time limit on antitrust reviews and said the lengthy process could result in companies not investing.
The European Commission in February cleared the creation of a joint venture between mobile operators Orange and MasMovil in Spain on conditions including the divestment of spectrum to Digi, which would enable it to build its own mobile network, following concerns that the combination could lead to price rises and undermine competition.
When asked about the hurdle of higher prices in consolidation being allowed in the sector, Ekholm said: “I think Europe is in a disastrous situation . . . [some politicians] are concerned prices short term would go up, but [it is] jeopardising the long-term competitiveness of the continent.”
He added Europe had “not grown as fast as the rest of the world because we lack the technology sector, we lack the digital sector”. Ekholm said he was also worried jobs would “get created somewhere else, where they actually build the new applications”.
Another concern of the Ericsson chief executive was the continent falling behind on 5G standalone, high-speed connectivity.
Population-wide 5G standalone coverage in Europe would generate more than €100bn in economic value by 2030, according to a new report commissioned by Ericsson from consultancy Analysys Mason.
The study projected a €28.2bn shortfall in commercial investment required to reach this level of mid-band spectrum coverage across 30 European countries — which could be used for anything from autonomous tractors to drone delivery of medicines.
Ericsson earlier this month reported net sales fell by 15 per cent year on year in its first quarter. Rival Nokia in April also posted a drop in net sales of 20 per cent in its first quarter compared to the same period last year driven by “ongoing market weakness”.
Both have also previously announced job cuts and cost saving programmes.
“Maybe I should just move on and forget about the museum but I was born in Sweden . . . I believe Europe has a real value in the world but I want Europe to be competitive,” Ekholm added.
