In the news: The last telegraph services in the
world came to a halt last week. Who would have though this can happen, less
than 40 years ago? Where the EU telecom operators
will be in 40 years?
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It is a rare occasion to see the president of
such a big EU company, such as Orange, getting so angry on the European
Commission but these are, definitely, times of big stress for the EU telecom
companies.
In an interview to the French press published yesterday, Mr.Richard is demonizing the European Commission as the source of
all the bad things that happen to this industry from 20 years to day. Mr.Richard is clearly upset and many things
may be said whilst anger is high. See here some
of these statements:
”The
Commission is the accomplice of an American player against the European
operators which employ and invest considerably in this industry. This would not
happen in US!” What ?
And further on :
”Brussels played
largely in favor of the Asians by implementing a regulation which aims solely
to reduce the prices and putting under pressure the Europeans equipment manufacturers,
such as Alcatel and Nokia”.
I could understand when such statements were made
by a minister in a Socialist government but I find it difficult for me to understand how such accusations can be made by the head of a (largely) private
undertaking.
Let’s think a little: The European Commission should be complacent
and support EU companies on the simple reason that they fight with an US
corporation? Failure to do this makes the European Commission “an accomplice”
of a complainant (tough words – “accomplice” is coming from the criminal law
and means someone is involved in a crime!).
Or should the Commission close its eyes on the mere reason that the
investigated companies create jobs and invest in Europe. I doubt that they are doing this as “Good Samaritans”
– they do it for profit. This is
absolutely normal but no company should claim a more favorable position because
of just doing its job.
Besides, Mr.Richard
is wrong – antitrust authorities in US do not use to grant a privileged status
to US Corporations – this is the country where giants such as Standard Oil and
AT&T/Bell Systems were dismantled following decisions of the antitrust authorities. By the way, the two giants that Mr.Richard
mentions in his interview as dominating in the US market – AT&T and Verizon
– are the results of the dismantling of the former incumbent in 1984 and their
force today, including the capacity to take over any EU mobile operator,
including Orange, is the result of pure competition, the very policy that the
European Commission promotes from 20 years and that Mr.Richard is blaming!
I doubt that such divestitures would have
happened in France and in most of the EU Member States, where the national
champions are praised but, of course, less efficient that competitors in US or
in Asia.
What about the reduction of the prices and the
fall of telecom manufacturers, such as Alcatel and Nokia? Both the Alcatel chagrin and Nokia imbroglio
originate inside these two companies and have nothing to do with the companies
from Asia. Nokia, for instance, missed the trend towards smartphones and was
overtaken with ease by the new tigers from Asia which flooded the market with
modern, good looking and (yes!) cheap smartphones coming from Asia + not so
cheap but desired smartphones coming from US (also produced in Asia). Nokia,
Alcatel and the like failed to notice the wave of change even until this well
above them. Most importantly, they failed to innovate and thought that they can
glide in the market.
I can agree that the European Commission is
sometimes too rigid and tends to overlook certain basic problems, for instance in
respect of ensuring a coordinated management of the spectrum in the Member
States or offering a clear roadmap for the telecom operators. The European Commission is not perfect but did
and is doing lot of good, from which the EU mobile operators also benefit.
If Orange and other telecom operators from EU
will continue to have a stance such the one expressed yesterday by Mr.Richard, their
future looks bleak - rather like Nokia’s than the future of Verizon or that of Wutchison
Wampoa. A softer hand from the European
Commission would do more harm than good and would just postpone this unhappy
end for the EU mobile operators. What is necessary, instead, is more dialogue
between the operators and the regulators, in order to conciliate the various
goals followed by the Commission with the possibilities of the market
players.
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