Europe is about to relearn an expensive lesson that spectrum policy is investment policy.
With more than 500 spectrum licences due for renewal over the next decade, the Digital Networks Act (DNA) will matter only if its pro-investment principles bite before governments turn the next renewal cycle into a fiscal harvest for national treasuries.
If Europe wants resilient networks that underpins artificial intelligence, smart factories, modern public services and economic security, it must now prove it by pricing spectrum as infrastructure, not as a tax base.
Encouragingly, European policymakers are finally looking to prioritise investment, efficiency and long-term network performance over short-term extraction.
Europe’s investment model is under strain
This is long overdue because the economic reality for telecoms investment remains stark.
In 2024, European telecoms capex fell by around 2 per cent, from €65.8 billion to €64.6 billion, even as Europe’s connectivity ambitions continued to grow.¹ European mobile users also pay dramatically less than those in other regions, around €14.9 per month on average, versus €42 in the US.² Not surprisingly, some European operators are struggling to earn their cost of capital, which is an unsustainable position for any industry.
To meet Europe’s connectivity ambitions, huge additional investment will be required. GSMA Intelligence estimates that Europe needs around €475 billion in mobile network investment over the next decade to restore leadership. Under current conditions, operators are forecast to invest around €270 billion, leaving a mobile investment gap of about €200–205 billion.⁴
Mobile operators have already invested €141 billion into their European networks since 2021.⁵ Even historically high capex has not closed the gap. Aggregate return on capital employed for Connect Europe members stood at 6.9 per cent in 2024, below the sector’s estimated cost of capital.³ When an industry cannot reliably earn its cost of capital, future investment suffers.
At its core, Europe’s spectrum policy determines whether networks are built at scale or constrained at source. By any objective benchmark, these constraints should be impossible to ignore in Brussels.
Europe is already near the limit of what the sector can reasonably sustain, yet still far behind where it needs to be.
Spectrum is the decisive policy lever
Governments have more influence than they may realise, because their choices affect several major mobile sector cost drivers. The most obvious is spectrum. The largest is network equipment, where public policy can raise costs indirectly through subsidising domestic suppliers or mandating costly 5G vendor swaps. Energy remains harder to control, but business energy prices in Europe are still above pre-2021 levels.⁶
Authorities therefore hold powerful levers to relieve pressure on telecoms economics. That makes spectrum policy the most direct test of whether Europe is serious about restoring telecoms investment.
GSMA Intelligence estimates that total spectrum costs tripled as a share of recurring revenues over the past decade, reaching around 8 per cent. It also estimates that forward-looking reforms, including low-cost licence renewals and longer terms, could save European operators roughly €30 billion in spectrum costs over 2025–2035.⁷
The DNA’s spectrum provisions - longer licence durations, renewal by default and coordinated pricing - signal a more rational single-market approach. The objective is clear. Efficient rollout and investment incentives should replace windfall auctions.
But timing matters. Europe now faces a major spectrum renewal cycle, with more than 500 licences due for renewal over the next decade.⁷ If the DNA’s principles are delayed, diluted or carved up by national exceptions, the investment signal will arrive too late to shape many of the decisions that matter most.
A more cohesive EU spectrum framework would mean long-term certainty and lower costs. That is the difference between capital being locked into renewals and capital being available for 5G standalone upgrades, additional capacity, rural coverage and future 6G readiness.
According to industry analysis, these reforms could move Europe’s mobile capex per connection towards global leader levels, roughly double today’s level.⁸
The test for spectrum reform
As the DNA text is negotiated, the test should be simple. Longer licence durations must remain meaningful. Renewal by default must not be hollowed out by broad discretionary exceptions. Pricing coordination must prevent outlier auctions that drain investment capacity.
This would not weaken obligations on efficient use, coverage or competition. It would put those obligations where they belong in clear licence conditions, proportionate sharing rules and targeted enforcement.
European governments must also avoid undercutting their own goals with short-term actions. Member States cannot treat the coming year as a last chance to extract revenue from the industry through pricey spectrum auctions before the DNA’s pro-investment rules take effect.
Instead, national governments should fully support and swiftly implement the DNA’s new approach, aligning short-term decisions with Europe’s long-term digital ambitions. The Commission’s vision for spectrum is the right one.
To turn that vision into reality, Member States must help deliver a new era of economically rational spectrum management. That means viewing connectivity for the productivity, resilience and growth it enables, rather than the quick cash it can raise.
Footnotes
1,2,3: State of Digital Communications 2026 – Connect Europe & Analysys Mason (Feb 2026) – https://connecteurope.org/insights/reports/state-digital-communications-2026
4: Mobile Economy Europe 2026 – GSMA Intelligence (Jun 2026) – https://www.gsma.com/about-us/regions/europe/gsma_resources/the-mobile-economy-europe-2026/
5,8: Mobile investment needs in Europe – GSMA Intelligence (May 2026) – https://www.gsmaintelligence.com/research/mobile-investment-needs-in-europe
6: Energy prices and costs in Europe – European Commission (Feb 2025) – https://energy.ec.europa.eu/data-and-analysis/energy-prices-and-costs-europe_en
7: Spectrum Pricing and Renewals in Europe – GSMA Intelligence (Dec 2025) – https://www.gsmaintelligence.com/research/spectrum-pricing-and-renewals-in-europe
Want to know more?
More stories
