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EU: billions for digital leadership

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The rollout of 5G networks in Europe can create around 2.4 million new jobs by 2025 and generate an annual increase in gross domestic product of 113 billion euros. These are the key data of a study prepared by the Boston Consulting Group (BCG) on behalf of the European telecommunications association Etno.

According to the study, digitization also plays a key role in the fight against climate change. This is because digital infrastructure and services help save up to 15 percent C02 emissions - through smart applications in sectors such as mobility and transportation. However, enormous investments are needed to achieve this: according to the study published today, 150 billion euros must flow into 5G and 150 billion into fixed networks with gigabit speeds. But increased investment is also urgently needed on the demand side, according to BCG: 85 percent of small and medium enterprises (SME) in the EU still do not use a modern cloud, and 60 percent of nine-year-olds are currently taught in schools that are not digitally equipped. BCG estimates that upgrading the digital infrastructure of all European schools would require 14 billion euros per year, equivalent to 1.8 percent of the EU's Next Generation post-Covid reconstruction fund. Similarly, digitizing all European SMEs would require 26 billion euros per year, equivalent to 3.5 percent of the Next Generation EU Fund.

The BCG analysis shows that the European telecom sector is accelerating its transformation in seven main areas: Network leadership, new models of collaboration, the next B2B generation, data-driven customer engagement, radical simplification, and new ways of working. This is leading to innovation in areas such as cloud, edge cloud, data-based services, e-ID, as well as OpenRAN.

The study sees an urgent need to catch up in the race for global leadership in digital technologies. To do so, the authors describe a number of urgent policy measures, including: strongly increasing investment attractiveness; enabling more industry collaboration and scaling in the sector; strongly stimulating demand and digital transformation in all industry sectors, prioritizing leadership in European digital services; and ambitious investment in digital capabilities.

For Telekom CEO Tim Höttges, such reforms are urgently needed: "We have catastrophic value creation for telecom companies in Europe. While our revenues are falling, the need for further investment is rising. Without networks and digital infrastructure, the discussion about digital inclusion is just theory." For Höttges, it's clear: "We need an Airbus in the telco industry to be competitive on a global level."

Roof terrace and dome of the Reichstag building in Berlin.

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