Speech at the Fiber-to-the-Home Council congress

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In today’s speech at the Fiber-to-the-Home Council congress in Brussels Gunnar Hökmark underlined that Europe needs to set targets in gigabytes instead of megabytes. The world will continue to change and develop. But with ambitious and concrete reform we can make sure that Europe is at the forefront of the digital revolution, turning our continent into a leading global hub in the future Internet economy.

Why Europe needs ultra fast broadband and should become a gigabit union

Europe was for a long time a global success story in the telecom world. The GSM standard in combination with years of liberalisation and openness to competition delivered wider choice, more convenience, and lower consumer costs. Europe was at the forefront of the technological evolution giving rise to new services and innovations. In short, Europe and the US were the global leaders.

Then the world changed.

A digital revolution swept in and brought opportunities for billion of people across our globe. There are today almost 6 billion mobile phone subscriptions in the world. China Telecom has over 700 million customers. Facebook have more than 1 billion active users. For TV it took 13 years to reach a market audience of 50 million people. For Facebook it took two years.

The market has shifted to the advantage of big and densely populated markets such as China and India where telecom operators and telecom companies can provide hardware, software and mobile calls at much lower prises than in small fragmented national European markets. In regions of the world where competitors will have immediate and rapid access to big markets for each new generation, the cost for the next generation will be covered much faster than anywhere else, be it infrastructure, technology or services. Emerging economies will not only have the economy of scale, which they didn’t have only ten years ago but they will also be driven by the scale of innovations.

Europe has lost it’s leadership to other parts of the world.

Emerging economies such as South Korea, Japan and Hong-Kong are connecting their markets with digital highways with fiber reaching around 50 % of the households today.

In Europe, 2,33 % of the households are connected to fiber. 2.33 % ladies and gentlemen.

I want to turn around this development. Global competition is good. It is good that other economies are becoming more innovation-driven and competitive. But, I want Europe to be nr 1 and a global leader in the telecoms world.

I want that new services, innovations and growth should come out from Europe. I want Europe to take the global lead in the digital revolution.

This is not an easy task and there is a lot to do. We need to create one single market where companies can easily distribute their services to Europe’s 500 million consumers. There is an urgent need to create a modern copyright regime to facilitate the distribution of content.

We need to continue meet the increase of mobile data with more spectrum releases for mobile broadband. We achieved a lot in the spectrum program but we must do more.

And we must drastically increase the deployment of high-speed broadband.  We need to have the fastest broadband in the world.

The benefits of fibre and ultrafast broadband is well know but let me take an example. In Germany alone, the construction of broadband networks is expected to create almost a million jobs over the ten years up to 2020. In France, the construction of a fibre-to-the-home network would generate 360,000 jobs per year, which translates into some €20bn of added value.

Europe needs a real push for the deployment of ultrafast broadband – which can deliver speeds of at least 1 gigabyte and beyond. The European Union’s current digital agenda targets that stipulate that all European households should have access to 30 Mbps, with 50 per cent of the households having access to at least 100 Mbps, is already outdated.

If we do not want to continue to lag behind, we must set targets in gigabytes instead of megabytes.

I have now received the Industry Committees support for ensuring that networks which are funded via the EU budget should deliver 100 Mbps to rural areas and 1 gigabyte to urban areas.

European funding for broadband can act as a catalyst for fibre investment, which can crowd in private investments that otherwise would not happen. This would connect the world’s biggest digital market and reach out to our universities, cities and capitals.

At the same time, if we do not raise the ambitions and speed criteria’s for broadband deployment in rural areas, the digital divide will increase even more. Big cities will move ahead anyway while rural areas will be incentivised to invest in slow broadband connections. This is not the right way to go if the whole EU is to be competitive.

The world will continue to change and develop. But with ambitious and concrete reform we can make sure that Europe is leading this change, turning our continent into a leading global hub in the future Internet economy.


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