To create wealth, Europe must reap the dividends of radio spectrum
The EU cannot ask its telecoms to compete globally while organising one of its most important sectors nationally
As the EU debates its next shared budget, one assumption has gone largely unchallenged: that despite Europe’s expanding ambitions, its resources are fixed. Defence, AI and the green transition all require greater investment. It has become a familiar exercise in redistribution, asking how existing resources should be divided among competing priorities. That is the wrong question.
Europe’s greatest advances have rarely come from redistributing wealth. They have come from creating it. The single market enlarged the European economy. The euro deepened financial integration. At decisive moments, European integration increased Europe’s productive capacity before increasing its fiscal capacity. Rather than asking only where Europe can find new revenues, we should also ask whether Europe already owns strategic assets whose value could be multiplied through deeper integration.
One such asset is radio spectrum. Every AI application, connected factory and digital public service ultimately depends on it. Yet despite building a single market for goods, services, capital and people, the EU continues to organise one of its most strategic economic resources through 27 separate licensing regimes. Europe cannot ask its telecoms companies to compete globally while organising one of its most important sectors nationally.
This fragmentation is becoming increasingly costly. Telecoms is no longer simply another infrastructure sector. It is the platform upon which the digital economy is built. AI, cloud computing, defence communications and industrial automation all depend upon resilient, high-capacity networks.
Yet operators continue to invest according to 27 different auction calendars, licence durations, renewal frameworks and regulatory conditions. Fragmentation raises regulatory uncertainty, increases the cost of capital, complicates long-term investment planning and delays network deployment.
The transition from 5G to 6G offers a rare opportunity to correct this. Over the coming years, the principal 5G spectrum bands will progressively require renewal across Europe. At the same time, the Upper 6 GHz band (6425–7125 MHz) has not yet been allocated. Rather than having 27 independent licensing exercises, Europe should establish a European Spectrum Union. Spectrum would remain the property of member states and existing licences would be fully respected until their expiry. Future strategic spectrum is allocated within a European framework, with co-ordinated renewal calendars, harmonised licence conditions and common technical and security standards.
The economic gains would be large: greater regulatory certainty, improved long-term investment planning, reduced financing costs and faster deployment of 6G networks. It would reinforce the EU’s telecoms ecosystem and technology base. Better spectrum policy is also industrial policy.
There is a second dividend. Spectrum allocations generate public revenues that today accrue almost entirely to national budgets. In an EU Spectrum Union, although member states could decide to retain part of the proceeds, the goal should be to channel up to 75 per cent of future revenues into the EU budget as a new own resource, with the remaining 25 per cent capitalising a European Investment Bank connectivity and technology facility.
Because the EIB can leverage its capital through market borrowing, that quarter of the proceeds could support investment well beyond its nominal value, financing AI infrastructure, quantum technologies and new digital networks. Rather than redistributing a fixed pool of resources, the proposal would expand Europe’s investment capacity. It is also aligned with Europe’s fiscal framework. Because spectrum revenues are not treated as discretionary revenue measures under the EU’s fiscal rules, member states have less reason to retain these one-off proceeds than they did under previous fiscal regimes. This creates an opportunity to redirect a substantial share of their value towards European public goods, while preserving flexibility for member states to retain part of the proceeds.
The goal is not to co-ordinate spectrum just because Europe needs more “own resources”. It is to complete the single market for connectivity because Europe needs stronger investment, more competitive telecoms markets and greater technological scale.
Critics argue spectrum is a national competence. They are right. But many of the EU’s greatest successes began as national competences before economic reality made deeper integration a better option. The question is not whether states can manage spectrum individually but if fragmentation is the most effective way to organise a strategic asset in a continental digital economy.
It is not. Europe’s history has advanced by pooling strategic resources. Coal and steel powered the industrial age. Today, connectivity powers the digital one. The EU budget should not simply determine how to spend Europe’s resources. It should also determine how to create them.