Tough talk on telecoms

The telecoms landscape is evolving rapidly, driven by myriad factors ranging from privacy and security concerns to the rise of artificial intelligence and the imperative for environmental sustainability. The sector can expect far-reaching implications for how business is conducted, particularly with regard to consumer rights and competition. Net neutrality has been a subject of ongoing discussion for some time, and 2024 will likely see the debate heighten. Towards the end of 2023, the UK’s communications regulator, Ofcom, revised its guidance, so expect similar revisitation of the issue internationally.

Service tiering (offering different levels of service quality or speed based on payment plans) and zero-rating (certain content or applications being made exempt from data usage limits) may find themselves in the spotlight.

Regulatory changes in 2024 may also address transparency in terms of service agreements, such as offering clearer information about data throttling. Stricter regulations may empower consumers with more robust protections against unfair practices. Those in the Netherlands, Germany and the US have all seen the switching off of 3G networks, and mobile providers in the UK will be retiring 3G this year to allow them to focus on fourth and fifth generation technology. As the shift in priority to 5G spreads across the world, regulatory bodies will deliberate issues such as spectrum allocation, security standards, and privacy concerns associated with 5G infrastructure. Ensuring universal access to affordable and reliable telecommunications services will also be a top priority. While 5G expansion will be encouraged, regulatory initiatives will aim to expand connectivity to underserved and rural areas.

Artificial intelligence continues to redefine many industries, and the telecom sector is no exception. Regulatory bodies will need to take positions on a variety of challenges posed by AI in areas such as network management, customer service and data analytics. Concerns about bias in AI algorithms and the ethical use of AI applications may prompt new guidelines and regulations.

Telecom companies deploying AI solutions may face scrutiny to ensure transparency and accountability in their algorithms. Regulators may develop frameworks to govern AI in decisionmaking, particularly where it impacts user experiences and data privacy. The issue of privacy has become a focal point for regulatory bodies worldwide, with an increasing emphasis on safeguarding user data and communications. In 2024, with US and UK elections, news coverage of cyber security issues will increase.

Security concerns related to cyber threats and network vulnerabilities will drive regulatory changes.

Governments and regulatory bodies will likely enforce comprehensive security measures to fortify telecom infrastructure against cyber attacks. This may involve the implementation of advanced encryption protocols, regular security audits, and the establishment of incident response mechanisms to mitigate potential risks.

We can also expect stricter regulations aimed at protecting consumer privacy in the ever-expanding digital ecosystem, and authorities are likely to demand more transparent data handling practices from telecom companies, perhaps with stringent penalties for non-compliance.

The Information and Communications Technology sector is responsible for about 2 % of global emissions, about the same as the aviation industry, and it is inevitable that the telecom industry’s environmental footprint will come under increasing scrutiny, leading to calls for more effective sustainable practices. Regulatory changes are likely to focus on reducing the industry’s carbon footprint, minimising electronic waste and promoting energy-efficiency.

Governments may introduce incentives for telecom companies that adopt green technologies and impose penalties on those failing to meet sustainability standards. Collaboration between regulators, industry stakeholders, and environmental organisations will be crucial in developing and enforcing regulations that promote a more sustainable telecom sector.

The 1990s saw the Communist Bloc fall and the rise of a global market supported by international structures for business and directives: market-oriented regulations dominated and there was huge growth in Media and Telecoms.

There became an imbalance between Telecom and Internet regulation: telecom networks were licensed nationally, whereas Internet services were internationally available across national laws, with the large scale and reach of the Internet creating considerable value.

The pandemic later highlighted the importance of controlling physical borders, and political discord between the USA, EU, China and Russia has intensified opinions that the Internet, Telecom and Media sectors are important security aspects that require increased supervision, defence and regulation.

In 2021, the Chinese government made sweeping changes limiting the power of large national Internet companies, andin 2022, the EU launched the Digital Markets Act (DMA) and Digital Services Act (DSA), which are designed to address imbalances in a way reminiscent of the Chinese regulations. The DMA aims to ensure a level playing field for all digital companies. The DSA is supposed to protect consumers from harmful content.

A more interventionist approach and more local variations will become common in the next few years. China and the EU have started a debate and will be busy in 2024 with the full implementation of their plans. Expect regulation to move from market-oriented globalisation to localised and more protective rules.

Competitive pressures are creating challenges for Telecom and Media players regarding increasing their average revenues, which in turn is depressing profit margins. But new and advanced networks are still requiring large cyclical investments. The number of mobile operators is reducing from four to three in most countries, and a similar transition can be seen in broadband networks. New technologies have required new approaches and perspectives from policymakers. An example is the ongoing deployment of 5G wireless networks. In several jurisdictions, policymakers are moving forward with subsidy programmes and other efforts to encourage the deployment of advanced networks more deeply into unserved and underserved areas.

Striking a balance between fostering innovation through healthy competition and preventing anti-competitive behaviour will be key for regulators. Telecom companies contemplating mergers will need to navigate regulatory approval processes carefully, considering national and international implications.