Deutsche Telekom CEO Tim Hoettges has called for a radical overhaul of the regulation of telecommunications companies in Europe, and a nuanced debate over the meaning of net neutrality when mission-critical services will demand priority over streaming video and audio content.
Hoettges explained at Mobile World Congress (MWC) in Barcelona on Monday that social network companies could be defined as communications services, but are not defined as such by regulation, creating a distorted advantage on social networking companies.
"Everything is converging. Is Facebook a communications service? Definitely yes. But it is not regulated as a telecommunications service when you look into the regulation.
"What we are seeing is our business models are merging into one. What you see is they are not fitting together."
Hoettges said it is "very hard" for telcos to build networks. He said that his own company is carrying a balance sheet of €110 billion just in infrastructure.
"At the same time, you get cannibalised by over-the-top services, which are totally asset light, and offering services for nothing. How could you compete with a voice, or an SMS, with a video service which is costing nothing?"
The CEO said that telcos are facing this cannibalisation of traditional services at the same time as governments, and the public are asking for telcos to invest more heavily in their networks.
"This model is disruptive. We have to be cheaper, we have to improve our efficiency, but if you are trying to compete against services that are free, it is going to be tough."
Hoettges said that there needs to be "one regulatory environment" applied to both telcos and over-the-top players.
He said that while telcos welcome net neutrality, the rise of connected devices, particularly driverless cars and medical devices, means that some traffic should take priority on networks.
"We [want] all content delivered at any time, but what is happening if a car is driving and it is connected to the infrastructure, while at the same time somebody is watching a video or listening to Spotify?
"Should we then [say] first comes first? Or should we steer what is relevant in these industries? The car should always be prioritised; health services should be prioritised depending on the technical and the need these services have," he said.
"Net neutrality: Yes. But we need quality classes to enable all these new services in the Internet of Things."
Hoettges said the recent FCC ruling on net neutrality in the US already anticipated the need for different quality classes.
The Germany-based CEO said he hopes the European data protection regulation would be finalised by the end of 2015, especially in the wake of the alleged NSA breach of Dutch SIM-maker Gemalto.
He said that above all else, telcos need "a fair level playing field", and said that similar to customers being able to easily churn from one carrier to the next, customers should be able to churn from one digital service to another.
His calls were echoed by the CEO of rival European telecommunications company Vodafone, Vittorio Colao.
Colao said he doesn't see why he should have to pay for an app that is the same across two operating systems.
"I also want to be able to continue to choose. I want to be able to port my digital life," he said. "Just like in the telecommunications space ... I can choose operators, I can change operators."