BREAKINGVIEWS-EU telcos face a long road to tech sovereignty

By Jennifer Johnson

BARCELONA, March 7 (Reuters Breakingviews) - European telecoms bosses face a long road to technology sovereignty. Though the sector’s annual shindig was buzzing with talk of artificial intelligence and new satellite applications, it remains conspicuously dependent on Silicon Valley to bring these offerings to life.

AI was clearly the intended theme of this year’s Mobile World Congress (MWC) in Barcelona, which drew some 100,000 executives, salesmen and technicians to the city between Monday and Thursday. No keynote speech or panel was complete without a nod to the technology that executives hope can unlock returns after years of stagnation.

AI could help operators run networks more efficiently, thereby boosting margins, or offer shiny new products to persuade customers to pay more. Yet that also means a greater reliance on American tech, as evidenced by a wave of Silicon Valley tie-ups announced at MWC. Deutsche Telekom, Europe’s largest telco in revenue terms, debuted a new AI phone equipped with Perplexity’s digital assistant. Meanwhile, both Orange ORAN.PA and Telefonica TEF.MC are experimenting with the Amazon Web Services cloud in their network architecture.

Nowhere is this dependence more apparent than in the satellite market. Elon Musk’s threat to axe Ukraine’s access to his Starlink satellite broadband showed how important sovereign communications networks are to Europe and its allies. On Tuesday, Reuters reported that Paris-headquartered Eutelsat ETL.PA was in talks with the EU to replace Starlink in Ukraine. The company’s share price is up by around 400% this week.

But doing so won’t come cheap. The terminals that connect users to Eutelsat’s OneWeb constellation cost as much as $10,000 each, plus a monthly subscription fee. Starlink’s ground terminals are just under $600 for Ukrainian users, with monthly running costs never exceeding $500.

The massive price gap is down to Starlink’s economies of scale and low launch costs. And the company has its eye on consumer applications next. At MWC’s satellite session, which proved so popular that late-arriving attendees had to queue to get in, a SpaceX executive said the group had launched 500 direct-to-device (D2D) satellites in the past year. These devices are designed to beam signal down to mobile phone users who venture beyond the range of terrestrial networks.

The theoretical buyers of these services are none other than telecoms companies, who think there’s a revenue opportunity in eliminating coverage dead zones. T-Mobile recently partnered with Starlink for D2D trials, as did Australia’s Telstra.

Vodafone VOD.L, on the other hand, is trying the non-Musk route – announcing the creation of a jointly owned satellite services business with AST SpaceMobile ASTS.O on Monday. The venture will aim to serve mobile network operators in Europe. Whether it can compete with the SpaceX subsidiary depends in part on the timely launch of AST’s satellite constellation, planned for this year and next.

Fittingly, one of the conference’s opening keynotes was given by U.S. Federal Communications Commission head Brendan Carr, who peppered his speech with praise for his country’s new president. European telco executives are probably feeling somewhat more ambivalent about their dependence on Trump’s Silicon Valley acolytes.

Follow @jenjohn_ on X

CONTEXT NEWS

Global telecoms companies and mobile device manufacturers gathered on March 3 to 6 at the Fira Gran Via in Barcelona for the annual Mobile World Congress.