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ETNO's position papers present its member-companies' views on a wide range of technical, regulatory and trade issues to European Union decision-makers, national governments and the general public.
They are developed either internally by ETNO working groups or, occasionally, in co-operation with third parties such as other industry associations.
Click here for definitions of ETNO Position Papers and Expert Contributions.
ETNO welcomes the opportunity to comment on the measures being explored by the European Commission in preparing the Data Act. This document complements our response to the public consultation questionnaire with regards to the two specific sections on business-to-government data sharing for the public interest and on business-to-business data sharing, building on our recent feedback to the Commission’s Inception Impact Assessment (IIA) on the Data Act.3 September, 2021 Read more
The European Telecommunication Network Operators' Association (ETNO) welcomes the opportunity to provide feedback to the Draft RSPG Opinion on the role of radio spectrum policy to help combat climate change.3 September, 2021 Read more
ETNO welcomes the European Commission’s (EC) aim to get a comprehensive understanding of the consumer Internet of Things (IoT) sector, and to assess whether competition in this sector may be restricted or distorted within the internal market.
As markets and technologies converge, European telecommunications providers have become increasingly entwined with wider consumer propositions and larger ecosystems. In the consumer IoT sector, our members typically provide the connectivity layer for smart devices. Additionally, several telecom service providers have their own IoT offerings – such as cloud-based platforms for the analysis of IoT data – and voice assistants.31 August, 2021 Read more
ETNO welcomes the European Commission’s (EC) initiative to look into two new initiatives aimed to make mobile phones and tablets more energy efficient and to improve their material efficiency.
European telecommunication companies have high ambitions to include sustainability and circular economy measures as essential core elements into their business.
Mobile phones and tablets are important parts of the business through which connectivity services become useable by customers. Here the telco industry needs to rely on the supply chain, and it has been requesting to its partners in the supply chain to include more sustainability features into their hardware design. This encompasses several aspects which include, inter alia, durability, longevity, and reparability, and which are also defined as objectives by the EC in its EU Circular Economy Action plan.17 August, 2021 Read more
ETNO welcomes the initiative of BEREC to undergo a stock-take of the lessons learned regarding communications networks and services for a resilient society, including the response of the NRAs.
The global COVID-19 crisis once more shed light on the importance of strong and reliable connectivity among societal and business communities. The COVID-19 crisis showed that telecom networks witnessed an increase in internet traffic, as entire societies moved to remote working, but ISPs have coped extremely well with the increase in internet traffic and they avoided networks congestions.
On June 15, 2021, BEREC published its second Report on WACC parameter calculations according to the European Commission’s WACC Notice of 6th November 2019 (‘WACC Report 2021’).
ETNO had taken a critical stance on the Commissions WACC Notice and the first BEREC Report in January 2021 and provided suggestions for rectifications to achieve the goal of a more harmonized WACC which would indeed provide the opportunity for a fair and simplified WACC setting throughout Europe.
The WACC Notice so far has not been changed and the BEREC Report2 now reveals the pitfalls of methodological shortcomings of the Notice: based on the current BEREC calculations national WACCs in a number of member states would fall below 5% (pre-tax, nominal), a threshold which has never been passed by NRAs before the Notice and which would be in contradiction to usual market WACC estimates for the regulated companies. The latter currently stand usually at least at high single-digit levels.
Such wrongly set WACC poses serious threats for electronic communications markets in Europe. It sends negative signals to investors and reduces trust in regulation as it shows that Regulators do not consider investors expected return on investments and furthermore, they would allow for disruptive decreases.
Although the WACC notice is formally limited to a WACC for legacy network regulation, such legacy WACC decisions could spill over to VHC where the legacy WACC is perceived as benchmark or basis for VHC WACC. Contrary to the Commission’s intention to promote the internal market the Notice may create distortions to EU internal market as countries with bigger differences with the current WACC figures for the telecommunication sector would be penalized.
The second BEREC report follows calculation methods of the first report but changes the peer group which is used for assessing major parameters such as the beta, gearing or debt premium for the analysis of the equity risk premium. The net effect of these changes are even lower WACCs in comparison with an unchanged peer group.
The main flaws of the Commission Notice remain. The Notice systematically underestimates the cost of equity in times of artificially depressed low interest rates for governments bonds (the “risk free rate”) by forcing NRAs to combine national low or negative bond yields of the past 5 years with a uniform EU average market risk premium which is derived from historic data on bond yields and equity market return over a very long time period without aligning the outcome with forward looking risk estimates and ignoring the effects of the quantitative easing policy on interest rates. Indeed, while low or decreasing interest rates have allowed companies to raise debt at better terms, the cost of equity did not follow this trend, resulting in an overall WACC estimates at company level significantly above the BEREC estimates following the EC’s notice.
The recent Ofcom estimate for the WACC of BT provides an interesting case study on the outcome of an alternative WACC estimate. Ofcom did not apply the WACC Notice methodology or the BEREC numbers but undertook its own investigation. As a result, Ofcom established a WACC of 7,8% for BT. Based on the first BEREC Report, however, the WACC should not have exceeded appr. 5,3%. Such a large gap is a strong indicator that the WACC
Notice might lead to a severe underestimation of correctly estimated WACCs. Wrongly set WACCs could cause significant harm on investments in European telecommunications. As the Commission has undertaken the review of the Next Generation Access recommendation, the current situation, while limited to legacy assets, might trigger wider damage to very high capacity network (VHCN) investments, at the opposite to the ambitious targets the Commission itself sets on VHCN.
ETNO hence reiterates its concerns and urges the Commission and BEREC to consider appropriate estimates of the WACCs to enable National Regulators to allow for a regulatory environment which supports and values investments.14 July, 2021 Read more
ETNO welcomes the possibility to provide its comments below in response to the public consultation on the Inception Impact Assessment on the future Data Act.25 June, 2021 Read more
ETNO (European Telecommunications Network Operators' Association) represents Europe’s telecommunications network operators and is the principal policy group for European e-communications network operators. ETNO’s primary purpose is to promote a positive policy environment allowing the EU telecommunications sector to deliver best quality services to consumers and businesses.
ETNO fully supports the EU taxonomy role as an essential facilitator of the EU Green Deal, with the purpose of channelling long-term, sustainable finance into sustainable activities.4 June, 2021 Read more
With the ever-growing number of data generated today, the EU needs the right governance model to unleash the potential of the data economy that could benefit to the society, citizens and companies. A key pillar of the EU Data Strategy (February 2020) welcomed by ETNO, the proposed Data Governance Act aims at boosting data sharing across sectors and member states while increasing citizens’ and companies’ trust and control over their data.
As the telecom industry can provide data market places and data broker services , ETNO welcomes the opportunity to provide feedback to the DGA and share its views to achieve a successful, competitive, and innovative single data market.10 May, 2021 Read more
ETNO and GSMA welcome the Commission’s initiative to create a harmonised ex-ante instrument targeted at the providers of core platforms services designated as gatekeepers via the Digital Markets Act (DMA). Current legislative instruments are not sufficient to ensure contestable and fair markets in the digital economy. This would also support the DMA’s objective to strengthen the internal market by setting out harmonised rules across the EU.6 May, 2021 Read more