Eurobites: French telecom investment continues to fall

French telecommunications regulator Arcep has reported a continued decline in capital expenditure across the national telecoms sector as operators adjust to changing market conditions. Total investment by French service providers fell by approximately 3 per cent in 2023, following a similar downward trend noted during previous fiscal reporting periods. This reduction in spending comes as the initial intensive phase of nationwide fibre-to-the-home deployment reaches a more mature stage in several regions.

The regulatory body noted that while investment levels remain high in historical terms, the peak of the infrastructure rollout cycle appears to have passed. In 2023, operators spent a collective 14.2 billion euros on network infrastructure, down from the 14.7 billion euros recorded during the prior year. The shift reflects a strategic transition from primary network construction to subscriber migration and service optimisation. Most major urban areas in France have now achieved high levels of connectivity, leading to a natural slowing of construction activity.

In the mobile sector, investment remains relatively stable as providers continue to expand 5G coverage and enhance capacity in rural areas. The industry is currently balancing the high costs of energy and hardware with the necessity of maintaining competitive network performance. Despite the overall fall in capital expenditure, the quality of services and the availability of high-speed broadband continue to show positive progress across the country. Arcep highlighted that nearly 85 per cent of premises now have access to fibre technology, indicating a successful transition from legacy copper infrastructure.

Beyond the French market, the wider EMEA region saw significant corporate developments including leadership changes at Ukraine’s largest mobile operator. Kyivstar, which is owned by the Veon Group, has officially appointed a new Chief Financial Officer as it navigates the ongoing challenges of the regional conflict. The company is focusing on maintaining network stability and securing the necessary funding for critical infrastructure repairs. This executive appointment is intended to provide financial stability as the operator continues its long-term investment programme under difficult operating circumstances.

In the United Kingdom, local technology firms are securing significant international contracts for infrastructure equipment. A British-based basestation manufacturer has recently been awarded a substantial contract with NATO to provide secure communication solutions. This partnership underscores the growing demand for sovereign technology capabilities within the European defence and telecommunications sectors. The contract involves the deployment of advanced mobile network equipment designed to operate in high-security environments, reflecting a diversification of revenue streams for domestic hardware vendors.

Continental European regulators are also turning their attention to the governance of artificial intelligence within the telecommunications and technology sectors. In Belgium, discussions regarding the oversight and regulation of AI systems have intensified as the European Union moves closer to implementing comprehensive technology frameworks. There are concerns within the industry regarding the speed of technological adoption versus the development of ethical safeguards. Companies are being urged to adopt transparent practices to ensure that automated systems do not lead to market distortions or consumer disadvantage.

Looking ahead, the French market is expected to see a further stabilisation of investment levels as the focus shifts toward 5G Standalone deployments and the decommissioning of 2G and 3G networks. Operators will likely continue to prioritise cost-efficiency measures while addressing the remaining connectivity gaps in the most remote areas of the territory. The long-term impact of reduced capital expenditure on innovation will remain a key area of monitoring for Arcep and other European regulatory bodies.