Today is the second day of the Mobile World Congress in Barcelona. Top CEOs from some of the world’s largest wireless operators took the stage and delivered a message to the regulators in Europe, Latin America, and the United States. Yes they are optimistic about the future of the communications industry but that doesn’t come without a request from the providers. They have all come together and are lobbying the challenges of keeping up with high traffic demands on their networks, mainly data. They have warned regulators that restricting new business models could slow investments in the networks. According to the GSM Association, the mobile market is expected to generate $1 trillion in revenue in the next two years.
CEO of Telefonica, Cesar Alierta, owner and operator of mobile networks in Spain and much of Latin America, said he wants to see regulators allow operators to recover more of the costs associated with upgrading their networks to keep up with increased traffic demands. “I still don’t understand why we are regulated at all,” Alierta said. “What we need is competition and openness. If they let us do that, we’ll do the rest. This is the fastest evolving industry in the world, and the regulators are always at least a step behind in their policy.”
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Vittorio Colao, CEO of Vodafone, echoed those sentiments. Regulators can’t be on autopilot and simply apply rules for older generations of networks on the mobile networks of today and tomorrow, he said. Instead a new “industrial” approach is necessary to encourage investment, he said.
This is what scares me
Randall Stephenson, CEO of AT&T, agreed. He said regulators should take a light approach in the rules they impose on wireless networks. History has demonstrated that when there is more certainty in the market regarding regulations that investment pours in, he said. “Just let us know what the rules are,” he said. “And then get out of the way and let us compete.”
Actually, if we look back on the market’s history of the 1990’s and new millennium, deregulation is what caused us to enter into one of the world’s largest financial dilemmas since the Great Depression. In Congressional testimony on October 23, 2008, Alan Greenspan, former chairman of the Federal Reserve Board, acknowledged that he was “partially” wrong in opposing regulation and stated:
“Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity — myself especially — are in a state of shocked disbelief.” Referring to his free-market ideology, Greenspan said: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”
Less regulation could possibly open the door for a plan to upgrade networks to keep up with increased traffic demands but we must take into account the cons of deregulation. It’s no secret that telecommunications providers are finding ways to get consumers to spend more money. Slamming and cramming are among ways to swindle the American people. Slamming is the practice by some U.S. long-distance phone carriers of switching users to their service without the user’s knowledge or authorization. If your carrier is switched, there may be a $5-6 switching charge on your bill, making your bill go up. Cramming is hitting mobile consumers hard right now. Cramming is billing fraud, bogus and phantom “taxes” being added to your bill.
Without any regulation, the world is open to more telecom scams in the future.