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FFTelecoms calls for a “french Digital Act”

FFTélécoms published the 5th edition of “The Economics of Telecom Report”, carried out by Arthur D. Little. This report is a reminder that telecom operators are the pillars of the digital economy. It also stresses that France and Europe are at risk of a “digital slip” despite recent initiatives. It calls for public authorities to restore a balance in digital-related policies, by benchmarking against best practices from around the world.

After a telecom wave that favored European leadership 20 years ago, followed by the internet wave that allowed US market players to set up their supremacy from 2000 onwards, a digital wave now surges across Europe and the world. This third wave provides an unequalled opportunity for growth and jobs in France and Europe, under the condition that a balance between supply and demand is being restored.

Backed by first-class quality networks and – especially in France- low prices, demand for digital services in Europe is tremendous; however, the European industry fails to deliver and the supply of services has to be imported.

As a consequence, the European economy does not benefit from the internal demand. Over the last five years, the digital ecosystem revenues decreased by 4% each year on average when they increased by 5% yearly in the world! All players are being impacted: not only did no internet giant emerge from Europe, but telecom operators- which are the pillars of the digital economy- saw their revenues decrease- especially in France where revenues decreased 17% between 2010 and 2014. Meanwhile, in the rest of the world, a correlation between the growth of the digital ecosystem and that of the telecoms market can be observed.

Even though French operators have maintained or even increased their investment effort throughout the period, investments begin to sag. If it were to persist, this trend would significantly impact the digital ecosystem and its ability to develop future services.

Despite recent initiatives, such as the “French Tech” program or the Franco-German digital conference, that aim at fostering the development of a French digital supply, French and European policies have focused mainly on spurring demand. Not only have telecom operators been left out of all supply-side-focused initiatives, but they also have been hit with an increase of sector-specific taxes that jeopardize their ability to invest in next generation networks.

These are the reasons why FFTelecom call for restoring a balance in public policies addressing the digital economy through a “French Digital Act” that should aim at encouraging all segments of the digital economy: from telecom operators, the pillars of this economy, to applications and services providers, and to start ups that will develop the digital services of the future.

Based on a benchmark comparing public policies in the most advanced countries (Korea, Sweden, USA…), the study highlights 5 key leverages to be used simultaneously to allow for France and Europe to fully embrace digital, using telcos as a stepping stone.

According to A.D. Little, these measures should provide France with the ability to spur digital supply and catch up with the most advanced digital economies. Currently, ICT accounts for 4% of total added value in France; would France reach the European average (5,5%), this would create 25 billion euros per year of additional value.

To learn more, see the press or full version of the study below :