Failures in telecom policy and regulation could hamper economic growth in Europe

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The telecom industry, governments and regulators need to move decisively to fiber in order to support future economic growth, states Arthur D. Little in its new report, “National Fiber Strategies: National economic imperative or just another private industry task?”

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There are clear economic benefits to improving broadband infrastructure; jobs are created, household income is increased and there is a permanent boost to GDP. Ultra-fast broadband also drives critical diversification of economies, as Small and Medium Businesses are among the first to benefit from new services. It is no longer possible to modernize and upgrade the copper-based network. Whole fiber or mainly fiber networks are now needed not only for the fastest fixed access services, but also to underpin the micro layer of the latest mobile backhaul networks.

These benefits do not come cheap, as the investment needed is vast. The re-wiring of Europe will cost hundreds of billions of Euros. “The challenge of how to attain the clear national economic benefits of the latest fiber infrastructure while managing the considerable investment required is still unclear in many markets,” states Andrea Faggiano, Principal with Arthur D. Little’s TIME practice. “Market liberalization has introduced strong price pressure in the EU and left most markets either with too much infrastructure or scarce resources to sustain real infrastructure competition (as opposed to the United States).”

Based on a global market survey, Arthur D. Little has identified five National Fiber models that governments around the globe have been following to reap the benefits from fiber. These models vary in terms of the degree of public investment to support fiber deployment and regulatory intensity. Based on its analysis, Arthur D. Little has concluded that the most promising fiber strategy models involve a hybrid approach, a combination of free market competition, government coordination and geographically-targeted public investment open to competitive bid.

“Governments need to rethink their infrastructure strategies to catch up with global best practice examples,” adds Dr. Karim Taga, Managing Partner and Global Practice Leader of Arthur D. Little’s TIME practice. Ultra-broadband is an essential infrastructure for national competitiveness, and public policy must encourage an investment-friendly environment to ensure that fiber is deployed nationwide.

To access the full report, please visit: www.adlittle.com/Fibre

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