Wednesday, 19 September 2018

Your academic research doesn’t support mobile mergers? Just say it does!

On September 7, Prof. Frank Verboven of KU Leuven wrote an article on Politico arguing in favor of the proposed merger between T-Mobile and Tele2 in the Netherlands. Verboven claims in the article that research he did proves investment rises significantly, while prices will rise modestly. Interestingly, the Politico article declared it was sponsored, but not by whom. After I called this out to Ryan Heath of Politico a notice was added that the sponsor was Deutsche Telekom, since then advertisments by Politico on Twitter have promoted the article.

I was alarmed that the article was commissioned by Deutsche Telekom and based itself on research by Christos Genakos (Cambridge) as lead author, with professor Valletti (Imperial College and European Commission) and Prof. Verboven as second and third author for CERRE, a think tank with many telcos, energy companies and some regulators as backers. Valletti is the head economic advisor to Commissioner Vestager. She has to approve or block this merger. That made me suspicious; is the merger a done deal already? However, Valletti commented and denied the article said anything in favor of the merger. In a subsequent tweet he clarified that mergers don’t improve investment but do increase costs for consumers.

So how can it be that Prof. Verboven claims that the same research said mergers benefit investment, when another author says they don’t? Is it just a mistake? Is there a misunderstanding? Is it just hyperbole? Or is there dishonesty at play? I looked around and I saw Verboven gave the same comments to the Belgian newspaper De Tijd on the possible entry of a new operator in Belgium. Here he also cites research he did with Marc Bourreau and Yutec Sun of Telecom ParisTech on the French market. Note: At the OECD I wrote a report on mobile markets with four and three mobile operators and the effects of increasing or decreasing their number.
Verboven uses three arguments:
  1. Prices for consumers will increase modestly. (citing Genakos)
  2. Mergers lead to considerable increases in investment, more than the increase in prices and don’t decrease total industry investment (citing Genakos)
  3. New operators lower the quality of service(s). (citing Bourreau)
I will show that the research does not say this. It says the exact opposite. Prof. Verboven misrepresents the conclusions of the research. Not only do prices increase, revenues increase by hundreds of millions, whereas investment rises by only a hundred million. New networks however increase quality and service offerings. It is impossible that he wasn’t aware that the research doesn’t support his conclusions. It is also not hyperbole or a consultant answering his master’s voice. This is an academic incorrectly citing academic research he (co-)wrote.

Prices for consumers will increase.

Verboven states in the article that: “On the one hand, standard economic analysis suggests that mobile mergers tend to result in some price increases, but the magnitude of these are, on average, modest in light of the general sharply decreasing price trend observed over the past two decades. He then argues that the introduction of Tele2 in the market didn’t lead to lower prices, other than what could’ve already been expected. In addition that Fixed Mobile Convergence puts Tele2 and T-Mobile at a disadvantage and there are the many MVNOs in the Dutch market, that will constrain price increases.
These statements are difficult to square with the observed effects and contradict the report he himself was a co-author of. The introduction of Tele2 in the Dutch market did lead to the introduction of “unlimited” offers, first by T-Mobile for €35 and later by Tele2 for €25. Such offers are not common in three MNO markets. According to Rewheel, the price per GB is significantly lower in four MNO markets and the gap between three and four MNO markets is growing. Interesting are comparisons between Austria, Belgium and Germany on the one side and the Netherlands on the other side over the same period. The moment the Netherlands went from a three to four market, the prices per GB dropped and usage went up. This didn’t happen in those other countries, who have three mobile operators, to the same extent, so saying it is part of a trend and implying it is not because of competition is very odd. The effect in France in 2012 was similar with the fourth operator adding subscriptions for as low as €2 (100MB+100Min+100SMS) and €20 (for 25GB and unlimited calls). We can see similar trends in other markets with new entrants and the reverse in markets with mergers (See OECD-report)

Investment will not increase more than prices.

With regards to investment Prof. Verboven says: On the other hand, such mergers also lead to a considerable increase in the investment per operator. As a result, our findings indicate that mobile mergers do not reduce total industry investment, contrary to theoretical concerns raised by competition authorities.” This is odd because Prof. Valletti said the research doesn’t actually make those claims. The Politico article suggests that they show a trade-off between quality and price or more precise between network investment (which he uses as a proxy for quality) and price. He states that the Cerre report shows that investment grew more than the prices raised. It is however the opposite by a five to ten times.
The report states: “A hypothetical average four-to-three symmetric merger in our data would have increased the bill of end users by 16.3%, while at the same time capital expenditure would have gone up by 19.3% at the operator level, always in comparison with what would happen in the case of no merger. More realistic asymmetric four-to-three mergers (between smaller firms in European countries) are predicted to have increased the bill by about 4–7%, while increasing capital expenditure per operator by between 7.5% and 14%.” These numbers are however relative. But they are relative to different base numbers:
Dutch mobile operators had € 4.749M in retail revenue in 2017 and €167M in investment per operator (670M total). A 16.3% increase would lead to €774M more revenue. A 19.3% increase in investment per operator would lead to (670/4)x19.3%= €32M more investment per operator (€97M total). The smaller numbers are even less favorable (€356M increase in prices and €70 increase in investment). That’s nowhere near a significant rise in investment. It’s like me saying my niece got 700% older in the last week, while I aged only 0.05%. It also explains why the author’s couldn’t find an overall increase in investment in the market. Using their numbers it’s clear that in the Dutch market the fourth operator’s investment wouldn’t be fully replaced. At the same time consumers would pay over half a billion more per year… for what exactly?
There are some arguments that might explain why investment is roughly the same in a three and four operator market. One example we found in the OECD-report is that in a number of countries with four operators, there were initiatives to share some of the fixed infrastructure, such as sites, poles and sometimes even active equipment. This was less prevalent in markets with three operators. One could also imagine that third parties, such as tower companies are more active in four operator markets, leasing out locations to multiple operators. This allows costs to be shared over multiple operators and also saves CAPEX.

New operators increase quality

With regards to quality he states that “The merger will create a mobile telecom operator with a sufficient customer base to invest in a nationwide 4G and 5G network and compete effectively with the two larger fixed-mobile operators.” The arguments he gives are that it will allow the two to spread investment, particularly for 5G, over both their customers and that locations to place antenna are scarce and less competition would allow better coverage. On the Belgian market he even states that an extra operator would lead to decreased coverage of rural areas. As stated in the previous paragraph in four operator market there is often more sharing of infrastructure. Which is for example the case in the Netherlands between Tele2 and T-Mobile. This doesn’t mean that the coverage is significantly less. Indeed, coverage in the Netherlands is for all operators in the top of the world according to various metrics.
According to professor Verboven his research showed that the introduction of a fourth operator in France led to lower priced, but also lower quality offers. With regards to the situation in France, the article by Marc Bourreau prof. Verboven references states that: “We show that the incumbents’ launch of the fighting brands can be rationalized only as a breakdown of tacit collusion in product lines: before entry the incumbents can collude on suppressing low-cost brands to avoid cannibalization, and after entry this semi-collusion becomes more difficult to sustain because of increased business stealing incentives.” Though in the article low quality is mentioned a few times, it is unclear what the author’s with low quality as the incumbents use their challenger brand on their own network. It appears its more perceived quality and maybe the internet-only nature, than the actual offer.
Quality is harder to measure, as it can mean many things to many people. The experience in France is that the new operator Free increased quality in service offers by adding contracts that could be cancelled any time, free international calls (now more than 100 nations), free roaming (also in a number of nations outside the EU) and innovations in purchasing and leasing handsets, all in a fixed price offer of €20 (or €16 for fixed line customers). The competitors followed in their offers. There were complaints about coverage, however it met its coverage obligations. It also leased access on Orange’s network for increased coverage, so it’s hard to say this is a lower quality offer than the one of its competitors. For France the OECD report found also that operators pulled their investment in 4G forward by 2 years to better differentiate from Free. So for the French quality increased on many different scales.
Indeed the article states that low-cost brands aren’t necessarily lower quality as they often introduced new features that appealed to customers in various ways. The article ends with the statement that: “A general conclusion from our analysis is that concentrated market structures may facilitate tacit collusion on restricting product variety. This adds to traditional concerns that increased concentration may facilitate collusion in prices or quantities, with a potential of generating considerably larger losses to consumers and welfare.” So it is difficult to see how Prof. Verboven reaches the conclusion that in France the introduction of Free led to lower quality for consumers, or that a fourth operator in Belgium would lead to a significant impact on quality and lower investments.


All in all, I find it very strange that a professor of a renowned university makes claims in sponsored articles, aimed at influencing decisions by the competition authorities of the European Commission that aren’t supported by the studies referenced. In addition that the claims he makes obfuscate the relative size of effects. Yes, investment may grow a bit more in percentages, than the costs to consumers, but in Euro the last number is an order larger. His call on the Commission to apply cutting edge economic analysis, begs the question whose analysis he’s referring to as it appears his own research doesn’t support the statements he makes in this article.

Saturday, 30 June 2018

Is the EU going to make it illegal to put church services on the Internet?

This is a call to action to my fellow Christians (Jews, Muslims, Buddhists, Hindus and others join too). Share this widely. Please contact your party’s representation in the European Parliament as they are about to hurt churches through copyright law and they appear oblivious to it. The new EU copyright law proposal that went through JURI Committee last week and is up for EU Parliament vote next week July 5 is the cause. There are two articles in it that churches should oppose, Article 13 (filtering) and Article 11 (Link-tax). The effects will be devastating, both for copyright law and for churches. Fortunately there are fixes possible.

It struck me that when I researched it, none of the representatives of Christian parties (ECR, Conservatives and Christenunie and EPP, CDA, CDU etc.) in the EU Parliament are opposing it. Worse, it’s actively proposed by the EPP-faction’s mr. Voss. They are heavily in bed with Big Media, forgetting most churches rely on small media and social media. The law is opposed by some liberal and left-wing parties amongst which the copyright oriented Pirate Party. So we must act and tell the Christian parties they are hurting the very people that send them to Brussels in the first place.
Now, I’m not the greatest copyright buff, I dabble. I’m also not the best Christian. I go to an non-denominational evangelical church occasionally (monthly??). I do care about both of them quite a bit as both have brought me great joy (and bitterness on occasion).

I base myself here on the works of and of Julia Reda of the Pirate Party who has some solutions. Some readers may grumble that those left-wingers and churches don’t always see eye to eye. However, those people take their copyright law as serious as many churchgoers take their Scripture, so let us work together and stop this bad proposal. If enough parliamentarians vote against this on Wednesday, it can still be blocked.

Article 13: the upload filter brings bad luck.

Anyway, why should churches (and other religious communities) be worried by the proposed changes to EU copyright law? Well, it’s particularly the proposed article 13 that would require intermediaries to filter any type of copyrighted content, up front, automatically, before it’s being published. This article makes the intermediary, Youtube, but also, your national Anglican-Lutheran-Reformed-Catholic-Orthodox-Evangelical church organisation is liable for all damages through copyright infringement. Let’s say you want to have a nice site with all the services of all the congregations you represent. Now, you get treated like the party responsible and liable.

That means that if you want to put your church service online, the intermediary has to check if anyone owns the copyright to the content of the service. Of course they do! A church service is 6 copyrighted songs, with a preacher citing from one or more copyrighted books (Yes, the Bible is copyrighted (except the KJV or Statenbijbel) and for good reasons, but still). And don’t tell me your church only sings century old hymns that are out of copyright, because some choir, singer or organist will have recorded these songs and their record label may have registered the copyrights to that performance. Youtube has a filter to check whether you violate any copyrights, but it’s not yet set to the toughest setting. If your church has a nice site with Wordpress or a local hosting firm and puts its services there, that site and hosting company is liable too and so they have to filter too. Unfortunately computers aren’t smart enough to know all intricacies of copyright. It doesn’t know if your church paid its copyright dues. or that the one who registered the content is using the same centuries old song, but played on an organ in your church by a famous organ player and then put it on a CD. So it all gets filtered and blocked.

A redress mechanism has been proposed that if you complain hard enough the content should get reinstated. Well, we all know how that works, it will be slow difficult and cumbersome and most won’t bother.

Article 11, just to make life of religious publishers harder

Article 11 is known as the link tax. It’s intention is that companies like Google should pay for using small snippets of an article on Google news. The way these link taxes have worked out in Germany and Spain is that anyone who cites news has to pay for it. That means any church or religious organisation’s newsletter has to pay. You can’t run a blog, a Facebook page, or anything where you point people to news that’s relevant to them, without paying the publisher. In Spain the effect was that these small aggregators ceased business.

In addition the effect in Spain and Germany was that Google News stopped indexing news sites. Traffic to these sites dropped. However it hurt smaller publishers way more than large ones. A Christian oriented newspaper, like Trouw, Reformatorisch Dagblad or Nederlands Dagblad in The Netherlands is by definition focused on a small group of people. Google News at least shows those that search that these papers exists and their opinion can carry weight. And when it’s visible, people click on the link and read. Without Google News people go to the Daily Mail, Bild and de Telegraaf.
Just think of how often religious organisations share snippets of news in their newsletters. What if you had to clear the rigths for that? 

So why didn’t I write this earlier?

Well, as I said, I’m not a copyright buff. I thought that things would solve themselves. If the inventors of the Internet, Vint Cerf and Tim Berners-Lee oppose it, If Wikipedia opposes it, if a whole bunch of scholars oppose it, we should be fine, but we aren’t. Big media and national broadcasters hate Google, Facebook, Netflix and others. This is their payback for 20 years of them having to change their business models. The sad thing is, the effect won’t be that they will do better, just that everyone is worse off, but at least it’s impossible to compete with them. With regard to churches, this means that some big churches and churches abroad (in the USA) can afford to put content online. For smaller ones it will become too hard. We all like an hour of Songs of Praise on the BBC, but that won’t get people into a local church. Protecting the national broadcaster so that his content doesn’t get uploaded is nice, but it shouldn’t prohibit a church or religious organisation from uploading theirs. 

Oh and if you think I might be wrong, have a look at these tweets and the reactions to them. The EU said funny pictures (memes) weren't affected. A quick reply from me caused a furor. (I never had this many reactions to a tweet before!

Monday, 1 September 2014

I am at the IGF 2014 in Istanbul

The Internet Governance Forum is held in Istanbul this year. I am fortunate enough to go to the meeting as part of the OECD team, we're here with a team of six. It will be my first IGF.

I organise one meeting on "Policies and practices to enable the Internet of Things". The proposal was ranked third! That's great and scary!

I am invited as a speaker in two others:
As always, please feel free to contact me. Twitter works, but I also have a local Turkish number +90 553 5471473. (Not a bad deal, 1GB of data, 100 minutes to Europe and 250 minutes and 250SMS local for €31 euro with Avea)

Wednesday, 1 May 2013

Speaking on Connected Television at IIC/Ofcom on May 2nd

It has been very quiet here for a while. I am of course active on Twitter, but I heard some of my readers don't use Twitter (you should, it is practical, don't tweet, just follow)

May 2nd I will be in London speaking on Connected Television. If you are around, leave a message. Maybe we can do coffee on May 3rd (or a beer late in the evening)

Connected TV and Platforms: evolution or revolution?

International Institute of Communications
UK Chapter Event

Connected TV and Platforms: evolution or revolution?
Market trends, dynamics, and policy implications
Thursday 2 May 2013, 17:00 for 17:30 Start

Kindly hosted by Ofcom
Riverside House, 2a Southwark Bridge Road, London SE1 9HA

In yet another sign that convergence is finally upon us, TV sets are increasingly connected to the Internet, and advertising for television sets seems increasingly to focus on which ‘cool apps’ they feature, rather than their size or picture quality. And it’s not just TVs: DVD players or PVRs now come connected to the Internet. The possibilities are vast, yet this is only a nascent market – and one which already raises many questions.  
How prevalent will Connected TVs become in coming years? What impact will they have on the delivery of online and broadcasting content? How will broadband television change the TV market? What changes can be expect from Satellite TV?  How will demand and usage patterns for connected TV evolve? Are there risks of vertical integration and generally for competition? Will the second screen be the interactive part of television? And for the legal wonks: what are the implications for content regulation and audience protection, and should the Audiovisual Media Services Directive (AVMS) be revised or renewed to accommodate the development of a connected device market?
To discuss this exciting and rapidly evolving phenomenon we will hear from a range of speakers, from different industries and from the public and private sectors:
-       David Mahoney, Director of Policy Development, Ofcom, will host and moderate the discussion
      Marcel Boulogne, European Commission
-       Rudolf van der Berg, OECD
-       Chris Hutchins, Vice-President, EU Affairs, Liberty Global
Numbers are limited and you are advised to register as soon as possible. Attendance is free to IIC Members and £30 for non-Members. 
Please note that registration for this event is now closed.   Please contact with CH1-13 in the subject heading for further information.
For IIC membership details please contact the IIC at

DATE FOR DIARY: 21 MAY: 4G – Prospects, concerns and policy implications.
For further information or to register your interest contact
For enquiries please contact the IIC secretariat on +44 (0)20 8417 0600. 

Tuesday, 25 September 2012

Interview and Conference on The Internet of Things

In COMMUNICATIONS & STRATEGIES No. 87, 3rd quarter 2012 Internet of Things: A new avenue of research there is an interview with me conducted by Martin Cave. I go into the many aspects of IoT and discuss the policy implications. The interview has been published online and you can see it here

There is also a conference at Telecom ParisTech where those who have written articles and those that were interviewed will present. (the conference is tomorrow, so you need to be quick. 

Tuesday, 26 June 2012

Presentation on M2M and market failure at Internet of Things-week

Last week I was invited to the European Commission's expert group on the Internet of Things to speak on OECD work. It was in Venice during Internet of Things-week, which sounds great until you realize it was 35 degrees Celsisus outside and 40 degrees inside. The European Commission currently is doing a consultation on the Internet of Things, so if you have opinions, voice them! Unsurprisingly maybe, I put the focus on market failure that currently impedes the growth of the Internet of Things.

Update: Here are some links to where I got the data: on coverage that 20% of locations are unavailable more than 10 mins/day

Wednesday, 18 April 2012

Policy Brief on Internet of Things and Transport

The International Transport Forum at the OECD is an intergovernmental organisation with 53 member countries. It acts as a strategic think tank for transport policy and organises an annual summit of ministers. For this years summit on Seamless Transport I wrote a policy brief on the Internet of Things and Transport.

Building the "Internet of Things"
In the coming years the Internet will move from connecting people to connecting things. In a new report entitled “Machine to Machine (M2M) communication: Connecting billions of devices”, the OECD analyses the
impact of this phenomenon. The report

  • finds new sources of growth
  • identifies significant barriers to the functioning of the market
  • proposes liberalisation to further open the mobile telecom market, to enable new entrants that may be transport, energy and healthcare companies, not telecom providers
  • argues to support trade and travel for manufacturers and service providers in providing these services across borders,
  • argues that removing barriers will result in billions in direct and indirect savings on mobile connectivity, and additional billions in new revenue from new services. 

In 2017, in OECD-countries an average family with two teenagers could have 25 things that are connected to the Internet: telephones, TV, tablets, printers, sports gear and health devices. But that is not all. Companies will dramatically change the way they design machines and devices, starting from the type of data they need to operate efficiently and effectively and then building the machine or device around it. Tens of billions of connected devices by 2025 is not farfetched. The combination of the data will allow smart transport, smart
cities, smart energy and smart health. for more see

Thursday, 22 March 2012

Presentation at Telecom Reform Conference 2012

I presented at the Telecom Reform Conference in Copenhagen. Good conference. The 1969 reference in the disclaimer is to Bill Melody's presentation at the OECD on the Carterfone decision. Bill Melody was also one of the organizers of this conference. BTW 1969 is way before I was born. Nice little anecdote, in 1969 liberalisation wasn't even an acceptable topic to the US delegation to the OECD. We've come a long way since then.

(Just noticed that the nice graphs I had on Roaming and MTR's didn't get included in the Google Docs version. If you have a solution, please mail me. If you want to see them, look here (roaming) and here (MTR)

Thursday, 1 March 2012

OECD report on "Developments in Mobile Termination"

As part of the OECD’s ongoing work to stimulate competition and innovation in mobile phone markets (see here for most recent news release on mobile roaming), this new working paper aims to contribute to the current debate among regulators in OECD countries who are reducing or considering the phasing out of the fees telecommunication network operators pay for delivering telephone calls to mobile wireless providers, known as mobile termination rates (MTRs).  This is because mobile operators have a monopoly over the termination of calls on their networks.

While it finds that rates have decreased across the OECD by 53% between 2006 and 2011, from USD 0.1406 in 2006 to USD 0.0650 per minute, there is still much divergence between countries. Rates are at zero in Canada and vary from the lowest (the United States (USD 0.0007/min), Israel  and Turkey (USD 0.0203/min) to the highest, including Estonia (USD 0.142/min) and Chile (USD 0.165/min).

The complexity and difference in the way that operators charge fees makes it difficult to draw a link between rates charged and prices paid by users for voice calls in different countries. But cutting rates to zero would strengthen competition in voice and other services, says the report. It could also speed up the introduction of innovative new VoIP services and encourage providers to offer a range of tariff models to meet the needs of their users, free from prices reflecting monopoly power on the networks of others.

Developments in Mobile Termination is available at
All the data in an excel file is available here:

The author Rudolf van der Berg is also available to answer any questions at +(33) 1 45 24 93 67, (+33) 6 58 15 85 08, or

Wednesday, 1 February 2012

OECD publishes report on Internet of Things and M2M

Look around you for a second and count the number of electronic devices, machines and gadgets. All of them -- light bulbs, cars, TVs, digital cameras, refrigerators, stereos, cranes, beds – will be connected to the Internet over the next 15 years, if they aren’t already.

Farmers will connect their livestock, machinery and fields through sensors. Medical practitioners and patients, fitness fanatics and those of us that require greater encouragement, will be monitored for everything from our heart rates to glucose levels to the special needs of pregnancy.

This is the potential of the “Internet of Things”: billions and billions of devices and their components connected to one another via the Internet. 50 billion devices by 2020, according to companies like Ericsson. The “Internet of Things” will radically alter our world through “smart” connectivity, save time and resources, and provide opportunities for innovation and economic growth.

The basic building block of the “Internet of Things” is machine-to-machine communication (M2M), devices equipped to communicate without the intervention of humans. The trends are already visible: Internet-connected TVs are now widespread; eBook readers must have a Wi-Fi or 3G connection; smart electricity meters have already become standard in many countries. More often than not, however, M2M is hiding in plain sight: information terminals in trains and buses, traffic lights and bicycle sharing systems, like the ones in Paris and London.
This new “Internet of Things” is the subject of a new OECD-report, “Machine-to-Machine Communication: Connecting Billionsof Devices”, and examines:

1.       New Technology: the drivers behind connecting devices to the Internet
2.       New Markets: user and business demands, and whether they are being effectively met
3.       New Policies: what governments can do  to promote this new source of growth

New Technology

-          The Internet of Things is enabled by ever cheaper communication modules, new innovations and applications of existing technology and the fact that the Internet has become available almost anywhere that people are.
-          M2M is very different from traditional telecommunication. It does not need a human to start or stop a communication. As a result it has the same economical life span as the product in which it is embedded (10 years for consumer electronics, 15 years for cars, 30 years for smart meters). It can process extremely low data volume or very high amounts.

-          Different networking technologies can be used to connect M2M devices, depending on the amount of mobility needed and dispersion over an area. 2G/3G/4G mobile wireless is, however, often an ideal technology for most applications.

-          SIM-cards could become the standard for authentication to use networks, as this removes or reduces the need for human interaction. Devices can be connected straight from the factory.

Table 1. Machine-to-machine applications and technologies, by dispersion and mobility
Application: smart grid, meter, city
remote monitoring

Technology Required: PSTN, broadband, 2G/3G/4G, power line communication
Application: car automation, eHealth, logistics, portable consumer electronics

Technology Required: 2G/3G/4G, satellite
Geographically concentrated
Application: smart home, factory automation, eHealth

Technology Required: wireless personal area (WPA), networks, wired networks, indoor electrical wiring, Wi-Fi
Application: on-site logistics

Technology Required: Wi-Fi, WPAN

Geographically  fixed
Geographically mobile

New Markets

-          M2M creates a new player in the mobile market: the “million device” user. These new large scale M2M users will potentially manage hundreds of thousands of smart meters, cars, and consumer electronics, possibly in higher numbers than some countries have citizens.

-          Large scale M2M users may offer their services in 10s to 100s of countries, selling the same devices globally. Their customers may buy the devices abroad and travel with them. As a result, manufacturers need to offer international connectivity solutions. The telecommunication industry, however, is still largely organised and regulated on a per country basis. Large M2M users will thus place new demands on telecom companies, and regulation and business models will have to adapt.

-          Companies creating innovative M2M-based services are currently locked into 10-30 year mobile data contracts and high roaming fees; this dependency hinders the role out of new services and innovation.

New Policies

-           Governments hold the key to set large scale M2M users free, by giving them access to wholesale markets. They will need to change the rules so that large M2M users can have access to numbers and SIM-cards, just like telecom companies have now. This will open up the market, break lock-ins, make large M2M users responsible for their own innovation and create a competitive market for roaming for M2M services. This liberalisation of the market will be a major paradigm shift, but might by some estimates lead to billions in savings and new services.

-          Privacy and security need to be designed into products from the start. M2M could allow a detailed view of people’s lives, and parliaments have already curbed or changed some projects as a consequence. For example, cars are increasingly using onboard M2M services (GM Onstar, Ford Sync, BMW ConnectedDrive) and the European Union is now mandating their own service (eCall) to be built into every car from 2014. Since EU legislation requires telephone companies to record a person’s location at the start of each mobile communication, and since turning a M2M car on will itself start a communication, these companies will be inadvertently tracking the start and end of any trip! The current challenge requires privacy by design, because as this example shows, even if the automobile company does not register the location, the telecommunication company by law will have to.

-          Governments have tried to make spectrum policy more flexible in recent years, allowing companies to change networking technologies when new technology becomes available. M2M may rigidify spectrum policy, however, because any time M2M uses a particular networking technology, it expects the spectrum to be there for the lifetime of the device, which is 10 to 30 years. The consumer-oriented wireless technology works on a timescale of a maximum 10 years.

-          Countries may run out of phone numbers in their current numbering plans as a result of M2M, because 2G and 3G equipped M2M devices require an E.164 telephone number to work. Only when 4G is used can M2M work with just an IP-address.

-          It is unclear which country should issue telephone numbers for any given device. Is it the country that device is used in, the country of the mobile operator, or the country of the large scale M2M user?
-          Combining data generated by M2M devices may offer great insights to improve society. Cars could notify local governments of icy roads or bottlenecks in infrastructures. This may not always be seen as positive, however, as shown by a case in The Netherlands where anonymous and aggregated data from GPS-systems was used by the police to identify prime locations for speed cameras, which led to a public outcry.

What is certain from the report is that governments will have to change regulations in the telecommunications market, will have to be vigilant to apply privacy and security regulation and stay innovative to make use of the many possibilities it offers. Doing so promises to transform the economy, promote growth in the telecommunications sector, and produce growth and efficiency savings in government and society.