Telecommunications risk their future | Business

Nearly half a century ago, Marty Cooper changed everything. On April 3, 1973, this American electronic engineer jumped onto Sixth Avenue in New York and, in front of a group of journalists, drew a device that weighed 794 grams, was about 33 centimeters high and 8.9 centimeters thick. It was the world’s first mobile. A prototype of the Motorola DynaTac 8000X. “When we created it, I knew that in the future we would be connected…, what I didn’t know is that we would have a connection with a powerful processor and with an internet connection… We didn’t know anything about that, because none of those things had been invented”, Cooper said later. Much has happened since then and the sector, that of telecommunications, has not stopped reinventing itself.

But it is in these years when the future of the sector is played out in the most demanding environment. This was mentioned by Roberto Sánchez, Secretary of State for Telecommunications and Digital Infrastructures, during his participation in the meeting The future of the telecommunications sector, organized by EL PAÍS and KPMG. The representative of the Government explained that the operators are pressured by the need for investment, to extend their coverage, in a context of high competition and in which the appearance and demand for new technologies is increasing. “There is a transformation of the business model, a vertical disintegration,” said Sánchez.

And this could be just the beginning of a new era for members of this industry. Society, during the pandemic, has given much more value to the telecommunications sector, according to Sánchez. “This means that more services with higher quality, safer and without digital gaps are demanded,” she explained. Next year, when 5G explodes in the market and the need for more fiber continues, according to Sánchez’s forecasts, the economy will accelerate its transformation. This will also require higher frequencies of radioelectric space. “We are going to need more frequency to be able to develop more associated capabilities,” he stressed.

“The level of speed with which the changes happen requires very good infrastructures… and, on the other hand, very significant investments”, commented Juan José Cano, president of KPMG in Spain. This hunger for resources, in his opinion, is leading to corporate movements within companies in the sector, seeking greater operational efficiency. “We find ourselves with 20 major brands and 100 virtual mobile operators, in an environment where we need 10,000 million euros [para completar la conectividad universal]”, highlighted Luz Usamentiaga, General Director of Regulation, Public Affairs and Sustainability of Orange Spain. The challenge is enormous. “We have a market in which 30% of the sector’s retail income has been lost in the last 10 years and at the same time needs growing investment”, added Elena Otero-Novas, Director of Legal, Regulation and Corporate Security at Vodafone Spain. .

“Income has been suffering and there is a struggle in terms of attracting and retaining customers,” explained Cano. “It is an extremely complex sector.” Operators, however, are not daunted. “We see the future with optimism. If there is something clear, it is that telecommunications have a future, they are necessary, and that they are increasingly in demand and essential. In Spain they live up to expectations”, warned Usamentiaga. According to the representative of the French firm, in recent years the operators in the country have invested some 15,000 million euros in infrastructures that have made it possible to extend fiber, XGSPON and the evolution from 4G to 5G. However, it still requires a greater amount of resources to continue expanding coverage: an additional 10,000 million euros to complete universal connectivity in the country, Usamentiaga stressed. Of that total, according to the expert, some 4,000 million are not covered. “This is where European funds have to play an essential role,” she stressed.

“The future is today,” said Juan Montero Rodil, Director of Public Policy, Competition and Regulatory Affairs at Telefónica. According to the manager, the investments that are required will allow the objectives set by the European Union to be achieved: such as guaranteeing universal access to internet services, facilitating the massive digital transformation of businesses and ensuring a highly digitized public administration. Montero Rodil mentioned, based on data from a study carried out by the Boston Consulting Group, that among all the countries in the area, some 300,000 million euros are required in the coming years for the deployment of the entire 5G network and fixed network with optical fiber that is needed to achieve digital goals. “The last train to be the leading group has arrived at the station,” he noted. And this effort, according to the representative of the operator, cannot be assumed by the firms alone. “Even having all our resources, these capabilities are insufficient for the challenge we face… We need public authorities… Not only aid, but also industrial policies that focus on the purpose of keeping Europe in the first global digital division,” he said .

He knows in depth all the sides of the coin.


One of the biggest challenges is keeping all market players under the same rules and obligations. In this sense, Otero-Novas, from Vodafone Spain, highlighted the imbalance that exists in the digital world: while the operators are making investments, the big platforms (Apple, Amazon, Netflix and Microsoft, which represent 56% of global traffic on the internet) remain on the sidelines. “There is a huge economic imbalance in who gets the economic benefit and who has to invest in infrastructure,” added Javier Arenzana, partner responsible for the Telecommunications sector of KPMG in Spain. “It is an issue that needs a resolution,” claimed Usamentiaga, from Orange Spain, which is facing its merger with MásMóvil. “What is sought [con la unión de las empresas] It is precisely to gain scale to have more capacity to face the investment challenges that we have in the future. It is a response to being able to cover 100% of the population with 5G and fiber networks”, he concluded.

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