Telecoms groups must make the right call

For Europe’s financially hard-pressed telecommunications sector, the spending cuts incorporated in the European Union’s 2014-20 budget, at the behest of cost-conscious governments, leave a particularly bitter taste.

Neelie Kroes, the EU commissioner in charge of the 27-nation bloc’s digital agenda, lamented that the cuts were so deep that they left no room for EU-level investment in high-speed broadband networks. As a result, it would be harder to hit the target of fast broadband coverage for all Europeans by 2020, she warned. As for Europe’s incumbent telecoms operators, they too are reeling in dismay. Instead of the €9.2bn originally proposed by the EU’s executive commission, there will be only €1bn in EU funds for broadband and digital infrastructure in the next seven-year budget cycle. This will weaken the companies’ ability to leverage EU financial support into large-scale private sector investments in modern networks, they claim.