(MENAFN- Gulf Times) The globe's biggest telecommunications trade show is held every year in Barcelona, intended to celebrate Europe's pivotal role in the genesis of the mobile industry. This year, the top speakers are two Americans who symbolise pressing threats for the region's carriers.
As more than 85,000 attendees gather for the four-day Mobile World Congress - among them Facebook chief executive Mark Zuckerberg and US Federal Communications Commission Chairman Tom Wheeler, who will be giving keynote addresses - executives are fretting over the growing digital divide between Europe and the US.
The event is emblematic of the malaise that has descended on European telecoms since the halcyon days of GSM, the first global standard for mobile, which was developed in the region. Since then, European companies have fallen behind US and Asian rivals such as Apple, Google, Samsung Electronics Co and more recently, China's Xiaomi Corp.
"It's typically European to debate for ages while things are being decided elsewhere," said Claudia Nemat, regional chief at Deutsche Telekom, Europe's biggest phone company. "That's not what I consider technology leadership. We've got to go for it, set the pace." Out of 50 countries assessed by the Digital Evolution Index, created by the Fletcher School at Tufts University, nine of the 10 that have registered the least improvement in technological innovation between 2008 and 2013 are in Europe.
Investors agree with the Tufts scholars. Over the past year, Apple, Facebook, Microsoft Corp and Amazon.com have added a total of $400bn to their market capitalisation, for a combined value of $1.5tn. Their increase alone is more than the entire value of Europe's four largest carriers, which together have capitalisations of $260bn, up about $60bn from a year ago.
And erstwhile industry leaders from the region have been taken over by US rivals. A year and a half ago, Microsoft bought Nokia Oyj's handset business for $7bn, a fraction of the $250bn the Finnish company was worth at its peak in 2000. Qualcomm in October agreed to buy UK chipmaker CSR for about $2.5bn to gain technology that lets machines communicate with each other.
As Europeans seek to restore the region to its place at the forefront of the industry, letting the Americans take an ever larger share of the profits isn't an option, according to Orange, France's largest carrier that operates networks from Belgium to Botswana.
"Europe isn't a digital doormat to the US," CEO Stephane Richard said
before the event. "We're not grumpy Europeans opposing Google, Amazon, Facebook and Apple, but there's too much at stake in the digital space, financially and otherwise, for Europe to stand by as the US dominates."
Europe is attempting to regain some of its faded lustre with innovations that may help define the next generation of wireless networks. Network-equipment vendors from Ericsson to Alcatel-Lucent will this week showcase products for future networks, while Gemalto, the largest provider of high-security mobile-phone and bank-card chips, plans to demonstrate new security applications.
Yet much of the focus this year will be on the Americans. While there will be plenty of European speakers, including Deutsche Telekom CEO Timotheus Hoettges, Ericsson CEO Hans Vestberg and Vodafone Group CEO Vittorio Colao, they will likely be overshadowed by Zuckerberg and Wheeler.
If last year's show is any guide, Zuckerberg will be the top draw. Hundreds of people queued for hours last February to get seats for the entrepreneur's speech, a welcome that no other executive got. This year, he's due to discuss connecting developing countries to the Internet.
More important to the executives at the show will be the question of net neutrality, including whether carriers can offer consumers streaming music or video that doesn't count against monthly data limits - which could give their in-house services or those of partners an edge over rivals. The answer will interest providers of popular services such as Netflix's video streaming and music downloads by Spotify. Wheeler, the FCC chief, last week adopted stronger rules for Internet providers that could serve as a template for other countries. The measure prohibits companies such as AT&T and Comcast Corp from blocking or slowing online traffic, or offering faster service to Web companies in return for payment. It also brings wireless Internet service fully under the rules.
That question will be on the minds of those who listen in on Wheeler's keynote address Tuesday, as they ponder the future of European regulation. The region's carriers have been requesting regulatory relief to help shore up profits, which have suffered as they invest to keep their networks from collapsing under rapidly growing traffic.
Nokia, the former mobile-phone maker that has refocused its business on network equipment, expressed its support for phone companies. CEO Rajeev Suri said in Barcelona that operators should be allowed to differentiate the quality of service for customers who are willing to pay more.
"We need clear legislation on data privacy, security and copyright issues, as well as a clear definition of net neutrality," said Thorsten Dirks, head of Telefonica's German unit. "If we had this, it would be much easier for the telecoms industry in Europe to win."
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