As the world becomes more digitalized and dependable, infrastructure for information and communications technology (ICT) is essential. The changing political, technological and economic environments ultimately challenge the telecom market. In an era when reliable digital networks are more important than ever, telecom operators are working to ensure the stability of their systems and services.
The European telecommunications industry is one of the most developed countries in the world. As of 2022, Europe had the highest proportion of unique mobile subscribers among global regions, with 90% of the European population being mobile subscribers, as well as the highest share of broadband connections per 100 inhabitants. The deployment of upgraded fixed and mobile networks has also been a primary focus of the market. However, these advancements come with a price. The European telecom market has already encountered a number of challenges.
5G deployment
According to GSMA Intelligence data, the majority of European countries have now deployed commercial 5G services and nearly two-thirds of the region's operators have launched 5G networks. By 2025, Europe will reportedly have 311 million 5G connections, representing a 44% adoption rate. However, European markets continue to lag behind global peers such as Japan, South Korea and the United States in terms of technology adoption.
The State of Digital Communications 2022 report published by the European Telecommunications Network Operators’ Association (ETNO) states that despite being available to 62% of the population, 5G adoption in Europe accounts for only 2.8% of total mobile connections, compared to 13.4% in the US and 29.3% in South Korea.
Cybersecurity incidents
The European Union Agency for Cybersecurity (ENISA) previously released a report regarding eSIMs. eSIM is the term used for the embedded form of a SIM (subscriber identity module) card. The eSIM is a tiny chip that is integrated into the device and serves as storage for digitally encoded information about mobile subscriptions.
The eSIM, which can be found in a variety of products including computers, wearable technology, medical internet-of-things (IoT) technology and security systems, identifies a subscriber within a mobile operator's network.
The identified security challenges are related to software attacks such as eSIM swapping, memory exhaustion and undersized memory attacks, as well as inflated profile and locking profile attacks. Cybercriminals have the ability to disrupt services or gain access to sensitive information.
So far, no major technical vulnerabilities have been discovered, with only a few reported cybersecurity breaches. However, widespread IoT deployment and the subsequent increase in the use of eSIMs may result in an increase in such cyber incidents.
European regulations
One of the biggest obstacles to consolidation in the European telecom market is regulation. European institutions play an important role in establishing a single European telecommunications market, which is expected to encourage development, increase its competitiveness and provide consumers with more excellent service for their money.
The EU adheres to a set of regulations outlining stringent guidelines for corporate mergers and acquisitions. Due to the potential harm to market competition and innovation, these regulations forbid the market from being dominated by one or two players. As a result, a number of high-profile mergers have been thwarted in recent years, including the 2016 merger of O2 and Three in the UK.
The future of the EU telecom industry is strongly intertwined with the region's broader digital transformation strategies. It is a path that is full of both opportunities and challenges. The sector must navigate technological advancements, regulatory shifts and landscape changes while playing a critical role in building Europe's secure and inclusive digital economy.
