Telcos appeal to G20 for ease of regulations

Say they'll devote $550 bil to build broadband networks

LONDON -- The global telecoms industry can help the world out of recession by creating 25 million jobs over the next five years, if regulation becomes less intrusive and it gets the spectrum it needs, industry leaders say in a letter.

In an appeal to the Group of 20 of the world's leading and emerging economies meeting in London, the signatories say they are prepared to spend $550 billion to build mobile broadband networks, boosting global GDP by 3%-4% over five years.

"We're not looking for a bailout. We're looking to invest," said Michael O'Hara, chief marketing officer of the GSM Assn. industry group, contrasting the sector with the banks whose future is a central theme of the G20 meeting.

The industry said that by investing in mobile broadband it can stimulate growth by connecting hundreds of millions of people to the Internet, especially those in less developed economies with no access to fixed-line networks.

"We believe we have the potential to connect 2.4 billion people to the Internet by 2013 via mobile," O'Hara told Reuters in a telephone interview. He estimated 200 million-300 million people are connected to the Internet through mobile networks now.

As a condition of that investment, the 25 signatories -- who include the chief executives of Nokia, NTT DoCoMo and Ericsson -- are demanding a more stable regulatory environment and fair prices for new spectrum.

"The business case for mobile broadband is highly dependent on regulatory policies. In recent times we have experienced a trend of increasing regulatory intervention, often where this is not appropriate," reads the letter released Thursday.

Unpredictable rulings from governmental bodies such as the European Union on prices telecoms companies can charge consumers and each other, or how they must share resources, discourage investment, the GSMA said.

"We're not anti-regulation," the association's Chief Government and Regulatory Affairs Officer Tom Phillips told Reuters. "What we're saying is ... that piecemeal approach is very damaging."

Phillips singled out the EU's executive arm, the commission, for particular criticism as having little discernible structure or strategy in its decisions.

"It's just about being expedient, short-term, politically popular. It's no way to run such a strategically important industry," he said.

The commission has issued many directives designed to stimulate competition and benefit consumers, most of which involve limiting the powers of dominant telecoms operators, in most cases former state monopolies.

Most of these large operators are also those with the means to invest in next-generation networks -- and the main signatories of the open letter.

But Phillips denied they would be the main beneficiaries. "I don't think it does necessarily favor incumbents," he said.

The GSMA, which takes much credit for developing an industry that has grown to more than 4 billion mobile connections worldwide, also called for the industry to be awarded some of the new spectrum becoming free as analog TV signals are switched off.

"With no spectrum, it's obviously hard to build out networks," O'Hara said. "The industry is very comfortable with paying for the spectrum, but we want fairly priced spectrum."

O'Hara declined to say what he thought a fair price would be, but did say the industry did not want a repeat of the tens of billions it paid in many countries for third-generation licenses that left many companies with debts they are still repaying.

Phillips said he was optimistic that the current dire economic straits the world finds itself in would encourage more compromise and dialogue between the telecoms industry, governments and regulators.

"In the current economic situation...we've really got no excuse," he said.
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