EU budget cuts hit investment in broadband infrastructure

Created February 19, 2013
News and Business

Investing in broadband infrastructure is not a priority for Europe, judging by recent developments at the European Commission. The Commission had planned to invest €9.2 billion in broadband and digital services, but budget cuts have reduced that amount to just €1 billion.

The money was part of the “Connecting Europe Facility”, which had been specifically designed to promote growth, jobs and competitiveness through targeted infrastructure investment at European level. The digital component of the fund was intended to support the aims of the Digital Agenda for Europe, namely to see every European able to access the internet at speeds of 30Mbps by 2020with 50 percent of Europeans taking subscriptions to 100Mbps services or higher.   
 
Neelie Kroes, vice president of the European Commission responsible for the Digital Agenda said she was “disappointed” that Member States could not agree on the proposal for the digital part of the Connecting Europe Facility. “The [remaining] funding will have to be exclusively for digital services: because such a smaller sum does not leave room for investing in broadband networks,” she said.
 
Industry groups have warned that the cuts will make it much tougher to meet Digital Agenda targets.
 
Luigi Gambardella, chair of the executive board for the European Telecommunications Network Operators’ Association (ETNO) said: “Investments in wireline networks in Europe in 2011 amounted to € 24.8 billion, with ETNO members accounting for 67% of this expenditure. Industry is finding it increasingly difficult to sustain this level of investment in order to meet the goals of the Digital Agenda.”
 
“The decision shows that there still is a lack of understanding in European governments on the importance of future-proof broadband networks,” commented Karin Ahl, president of the FTTH Council Europe. “The European Union has just missed an important chance to make the right decision, not only for the years to come but also, and more importantly, for the future of a competitive Europe.”
 
By Pauline Rigby

See Also: 

Blog of Neelie Kroes: A budget for European growth

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This article was written
by Pauline Rigby