Oscar Guinea and Dyuti Pandya / Oct 2026
Image: Shutterstock
Economic dependence has become a fixture of Brusses speak. It is an obsession born of repeated shocks. The pandemic exposed Europe’s reliance on foreign masks and Russia’s invasion of Ukraine did the same for gas. More recently, Washington’s decision to restrict foreign access to Anthropic’s most advanced AI models brought similar concerns into the digital economy. But economic dependence is rarely one-sided. In telecommunications, European companies remain important suppliers of technology on which other countries, including the US, rely. EU rules on telecoms investment and network services could erode this competitive advantage just as the global race for 6G leadership intensifies.
Economic dependencies are part and parcel of an open global economy, in which trade allows countries to specialise and consumers and firms to benefit from better and cheaper products. The question is whether critical inputs come from a diverse range of foreign suppliers or only a narrow set of countries. In 2023, the European Commission identified 204 products in sensitive industrial ecosystems for which the EU is highly dependent on foreign suppliers. Yet in an increasingly knowledge-based economy, economic dependencies extend beyond traded goods to the innovations and technologies that underpin them. In The 6G Wake-up Call for Europe, we map Europe’s reliance on foreign innovation across 32 research-intensive sectors. For each sector, we measure the share of R&D spending by firms outside the EU and whether that foreign spending is concentrated among a few companies.
Figure: Foreign Technology Dependency Ratio (FTDR) and Foreign Technology Concentration Index (FTCI) for R&D Spending (Average 2014–2024)
Source: ECIPE.
Software, computer services and technology hardware look as expected: Europe depends on innovation produced abroad by a small group of companies. Telecommunications is the exception. It is the only ICT sector that occupies the favourable bottom-left quadrant of the chart. Europe’s reliance on foreign R&D is below the median, and the foreign innovation on which it does rely is spread across a broad range of firms.
Europe earned that space on the graph. Nokia and Ericsson are the famous names, but they sit within a wider industrial ecosystem of equipment makers, component suppliers and specialised firms spread across the Union. These European companies supply the antennas, base stations, and hardware that connect mobile devices to the internet and shape the standards that will govern the next generation.
The Americans know this. In 2025, Ericsson held more than 50 per cent of the US market for this critical mobile infrastructure, while estimates in North America could be as high as 70 per cent. Ericsson supplies equipment to all three major US mobile operators – AT&T, T-Mobile and Verizon – while Nokia remains another important supplier.
The irony is that Europe may be weakening one of these strengths at home. Telecoms policy has long prioritised lower prices, open network access and service competition. But as Europe is discovering, cheap connectivity is not a free lunch. By restricting how companies can offer and price differentiated network services, these rules limit operators’ ability to develop advanced features, reducing the expected returns on investment in new infrastructure.
The numbers speak for themselves. Using OECD indicators of regulatory restrictiveness, where a score of 1 represents maximum restriction, our study gives the EU an average score of 0.85 for mobile telecommunications infrastructure regulation, against 0.6 in China and 0.2 in the US. These restrictions discourage the rollout of new networks. In 2025, standalone 5G availability reached 31.6 per cent in the US, compared with just 2.8 per cent in the EU, and no EU country reached 10 per cent.
Moreover, when looking at Europe’s approach to the 6G ecosystem, one has a grim sense of déjà vu. The EU is repeating the exact same mistakes it made when regulating its digital economy – suffocating a critical sector under overlapping compliance. The proposed Digital Networks Act, the Data Act, the Cyber Resilience Act, and NIS2 impose competing obligations on companies developing next-generation telecommunications services. These rules increase compliance costs and create uncertainty around the development and commercialisation of new services, even before firms know which technological standards will succeed.
These regulatory burdens are a strategic vulnerability. Economic resilience is like a balance sheet. Europe is safer when other countries rely on European technology. Telecommunications equipment is one of the few sectors where Europe still holds that advantage. As the industry moves towards the next technological frontier, the European telecommunications sector must translate its technological expertise into new products and services that generate sufficient returns to sustain future innovation. This is already a precarious balancing act: between 2016 and 2024, Nokia and Ericsson invested an average of 18 per cent of net sales in R&D, while recording operating margins of only 3 per cent. Given these margins, policies that weaken investment incentives or constrain firms’ ability to commercialise new technologies undermine not only one of Europe’s remaining strengths in the digital economy but also its ability to withstand economic coercion.
