Europe’s Digital Sovereignty at Risk: Telecom CEOs Call for Consolidation and Faster Regulation
BARCELONA, March 3, 2026 — European telecom executives warned that Europe’s ambitions for “technological sovereignty” are at risk without significant consolidation and a faster pace of regulatory change. Speaking at Mobile World Congress (MWC) in Barcelona, the CEOs of Deutsche Telekom, Telefónica, and Eutelsat called for quicker European regulation and government investment in key areas like cloud computing, semiconductors, and satellite systems.
The panel discussion, moderated by Vivek Badrinath, director general of the GSMA, highlighted the critical role of connectivity in sectors ranging from healthcare and manufacturing to energy and public services. Badrinath emphasized the increasing demand for next-generation networks while acknowledging Europe’s struggle to translate its ambitions into tangible results, scale, and capital mobilization.
Europe’s Reliance on Non-European Suppliers
Badrinath cited the European Chips Act and the Digital Decade targets as major initiatives, but noted that Europe remains heavily reliant on suppliers outside of Europe for essential components like semiconductors, cloud computing services, and core network technologies.
Sluggish Growth and Regulatory Concerns
Tim Hoettges, CEO of Deutsche Telekom, criticized the sluggish pace of progress in Brussels, stating that the European telecom industry experienced a 2% decrease in investment compared to the previous year, falling behind the United States and China. He argued that market structures in the US and China are more conducive to stronger investment.
Hoettges as well voiced concerns about the European Commission’s proposed Digital Networks Act (DNA), stating that it is unlikely to deliver the promised investment and has added 16 new tasks for the Body of European Regulators for Electronic Communications (BEREC) instead of reducing bureaucracy by 50% as pledged.
Expanding the Policy Debate
Hoettges advocated for broadening the policy discussion beyond mobile and fixed networks to include cloud computing, artificial intelligence, chipsets, graphics processing units, and “physical AI” – AI systems controlling machines and robotics.
The Need for Scale, Speed, and Pro-Technology Regulation
Marc Murtra, CEO of Telefónica, identified scale, pro-technology regulation, and speed as essential elements for restoring Europe’s competitiveness. He emphasized the need for deep investment in major technology products and regulation that prioritizes “the creation of technology.” Murtra pointed out that the rapid pace of innovation in AI, with products evolving every three months, contrasts sharply with the “already fifteen-years” outdated state of existing telecom regulations.
Telefónica is undergoing internal restructuring, shedding obsolete technologies and business lines, focusing on future skills, and adopting a more vertical structure to embrace calculated risk.
Satellite Constellations as a Sovereignty Case
The panel highlighted satellite technology as a concrete example of European sovereignty. Jean-François Fallacher, CEO of Eutelsat, stressed the importance of mastering low-Earth orbit (LEO) satellite constellations for global broadband coverage, which require significant lead times and capital investment.
Eutelsat’s OneWeb constellation, with approximately 650 satellites currently in operation, is the only operational system that is neither American nor Chinese. Recent shareholder investment of €1.5 billion ($1.7 billion) has enabled Eutelsat to order an additional 440 satellites from Airbus. The OneWeb business is growing at 60% year-over-year and generated over €200 million in revenue, representing roughly 20% of Eutelsat’s turnover.
Fallacher also pointed to IRIS², the European Union’s planned secure connectivity constellation, as a long-term sovereignty project expected to be completed by 2030. Eutelsat has secured a €1 billion agreement with the French Ministry of Defense for service use and constellation hardening over 10 years.
Addressing Fragmentation and Encouraging Consolidation
Hoettges argued that Europe’s fragmented structure, characterized by national markets, hinders operators’ ability to synchronize software and hardware deployment, while global platform players benefit from economies of scale. He stated that Europe’s antitrust approach discourages consolidation and that capital markets do not reward mergers.
Deutsche Telekom has launched an “AI industrial cloud” in Munich, powered by 10,000 Graphical Processing Units (GPUs), scalable to 20,000 with state support or deregulation. The cloud combines Deutsche Telekom connectivity, a German-built data center, and a sovereign application infrastructure. However, Hoettges acknowledged the reliance on Nvidia graphics processing units due to the lack of domestic alternatives at that scale.
He emphasized the need for governments to act as “anchor tenants,” committing health and defense workloads to domestic facilities instead of opting for cheaper foreign providers.
Cybersecurity Initiative and Equipment Replacement
The panel discussed the European Commission’s January cybersecurity initiative, aimed at replacing Chinese telecommunications equipment. Some industry representatives view this initiative as potentially counterproductive if it diverts capital from investments in new networks. Murtra criticized the focus on hardware replacement as “the easy way out” and highlighted the lack of cost-benefit analysis and opportunities to modernize regulations for differentiated service offerings.
Fallacher mentioned that French authorities blocked Eutelsat from selling its earth station network, considering it a strategic asset.
The Path Forward: Procurement, Consolidation, and Regulation
The executives concluded that Europe’s sovereignty ambitions depend on governments pairing industrial policy with procurement commitments, consolidation rules, and faster regulation that aligns with the investment cycles of satellites, cloud, chips, and AI.