Europe’s internet economy is “lagging behind” other major markets and more grassroots investment and cooperation is required to change its course, an EU official told the Open Mobile Media summit in London today.
Carlota Reyners Fontana, a member of European Commission vice-president Nellie Kroes’ cabinet, told the conference that Europe was “not doing well” and telecom industry revenues are shrinking despite the booming internet economy.
According to Fontana’s figures, while IP traffic has grown by 836 per cent in western Europe, telecom revenues have dropped by 10 per cent. In contrast in the US, IP traffic has surged 966 per cent and telecom revenues are up by 35 per cent.
“Mainly US companies are profiting as the internet economy grows,” she said. “It’s not that European companies are unsuccessful, but they don’t stay in Europe.
“We need to support innovation. We need to create in Europe the right ecosystem for innovation with the right conditions to grow.”
Fontana added that “trust and security” was a vital issue moving forward, and nodded towards legislation currently working its way through Europe that addresses a range of issues including consumer rights and net neutrality.
The EU hit headlines last week when it ruled against Google in one of a number of ‘right to be forgotten’ cases making their way through Europe when it agreed that the public should have the right to request that Google remove certain information about them from its search engine listings.
While the ruling was claimed as a victory for privacy lobbyists, critics said it set a dangerous precedent.
“We need trust and security,” she went on. “This is what consumers need to ensure they use and enjoy services, but also businesses need trust. Without trust we will not make every European digital, we will not boost e-commerce, we will not boost the digital single market.
“The problem in Europe is fragmentation. The telecom market is the only one that is still not benefiting from a single market. Still in the telecom market we have 28 national markets, 28 regulators, different spectrum allocation, different consumer protection.
“This is preventing operators from reaching out to a potential market of 500 million customers and is therefore certainly not helping at the moment to promote investments.”
In April, the European parliament backed the legislation, dubbed the ‘net neutrality bill’, which includes a commitment to prevent internet service providers from charging website operators for the delivery of their services to internet users. In the US, the market is going in the opposite direction and the FCC is now considering the adoption of new rules that would end net neutrality and allow internet ‘fast lanes’ for companies that can pay.
“We are for the first time in Europe setting out rules which will prohibit the blocking and throttling of services and applications, which will set out specific circumstances for traffic management by operators, that will ensure that the provision of services without negatively affecting the overall internet,” Fontana said.
She added that an “end to unjustified costs for roaming” and international call costs was also a priority ahead.
Fontana also detailed a range of efforts from both within the EU and from the private sector to change Europe’s fortunes by tackling its problems in schools and universities.
A group of European companies and entrepreneurs including Spotify, The Next Web and Tech City UK have united to create the ‘Startup manifesto’, to call for action on a range of issues facing the industry from education skills and the need for change within curriculums to providing more practical advice on accessing capital or privacy issues.
“The European Commission has set up a ground coalition for jobs, trying to make links between the private and public sector, between business and education, in order to match where the gaps are, find out which skills are needed and which are being offered. Coding is a technology at the heart of many of the digital revolutions,” Fontana said. “Why can’t we make sure that this is offered in every school in Europe?
“There is a dramatic skills gap in Europe,” she added. “The skills required today are certainly very different to a decade ago but universities have not yet changed and adapted their curriculums.”