When Patrick Drahi revived the sale of a stake in a German fiber optic network this month, the headlines focused on familiar themes. The industry’s high level of leverage and asset sales reflect a large debt position built up over a decade of unusually cheap capital.
It’s a narrative that fits well with the common description of European telecoms: as an industry characterized by capital intensity, long investment cycles and complex balance sheets.
But behind this focus on ownership and balance sheets lies an often forgotten reality: telecommunications networks do not generate revenue simply by existing. Fiber on the ground and spectrum in the air will only become viable through a dense commercial layer between operators and customers. Sales platforms, distribution partners, call centers and customer acquisition machines are what transform capital investments into cash flow. This machinery is rarely discussed, even though it is crucial to the success of telecommunications strategies.
The commercial level that determines profitability
The scale of this layer is not marginal. Analysys Mason estimates that customer acquisition and retention costs account for 15 to 25 percent of European telecom operators’ operating expenses. In highly competitive markets such as Sweden, Great Britain and the Netherlands, annual mobile customer churn rates are regularly over 20 percent. Under these conditions, profitability depends less on network coverage and more on how efficiently services are sold, retained and maintained.
Jason Grannum and the execution gap
A different type of telecommunications entrepreneur is operating here. Jason Grannum built his career in Sweden not by owning networks or bidding for spectrum, but by building and scaling sales and distribution companies embedded in the industry’s commercial infrastructure, achieving significant commercial scale in one of Europe’s most competitive markets.
As a mobile virtual network operator through a licensed partner, his companies delivered fully branded services, relying on Tele2, one of Sweden’s leading telecommunications companies, for nationwide network coverage and performance. The agreement illustrates how value in mature telecommunications markets is often created without owning assets through implementation at scale. Recruitment, incentives, compliance and performance tracking were treated not as overhead but as key strategic levers, managed with the discipline typically more familiar from incumbents than entrepreneurial start-ups.
Over time, this implementation-oriented model became repeatable. Grannum has co-built multiple businesses within the same commercial tier of the telecom ecosystem, working closely with major operators and regulated partners. In markets characterized by low margins and constant churn, this type of persistence is itself an indicator of strategic relevance.
Connectivity does not guarantee returns
Sweden offers a good example of why this is important. With fiber-to-the-home coverage of over 80 percent and some of the highest mobile data usage rates in the EU, it is one of the most connected countries in Europe. At the same time, the average revenue per user remains relatively low. According to the Swedish Postal and Telecommunications Authority, ARPU values lag behind those of Germany and France. For operators, profitability therefore depends on operational efficiency rather than pricing power.
In this environment, sales processing becomes essential. Call center productivity, consumer compliance, and employee retention directly impact margins. A poorly managed distribution channel can wipe out the gains made through network optimization. Conversely, a disciplined sales operation can maintain revenue even when subscriber growth slows.
The blind spot in the boardroom
This operational reality is often at odds with the structure of telecommunications leadership. McKinsey research shows that executives devote disproportionate attention to capital allocation and regulatory strategy, while frontline sales and service performance is delegated down or outsourced. The result is a persistent gap between boardroom priorities and customer experience. This gap tends to widen in large, leveraged corporations where refinancing and restructuring dominate management’s agenda.
Entrepreneur-led models differ less in ambition than in structure. Sales operations are tightly managed, costs are tracked in real-time, and frontline performance feeds directly into strategic decisions. This operational proximity is not a stylistic preference, but a response to markets where competition is intense and pricing flexibility is limited.
Lessons from disruption beyond pricing
A different but related lesson can be learned from Xavier Niel, whose disruption of the French market is often blamed solely on pricing. However, Free Mobile’s influence came from both commercial implementation and low tariffs. Lean distribution, simplified offerings, aggressive customer acquisition, and early adoption of online sales allowed the company to scale quickly without the overhead costs that burdened historical players. Network investments were important, but it was the distribution model that translated that investment into market share.
Uptake rates are lagging
Similar patterns are emerging across Europe. According to Ofcom, virtual mobile network operators now account for more than 15 percent of mobile connections in the UK. These companies have no infrastructure. Their competitiveness relies almost exclusively on sales partnerships and efficient customer service. In fiber markets, usage rates still lag well behind coverage. Across the EU39 region, only around 53 percent of FTTH/B-equipped households are actually connected, although coverage has reached around 75 percent. In some countries the gap is much larger: France reports consumption of almost 78 percent once fiber is available, while Germany and Italy remain at around 25 percent. These differences indicate how the sales process and
Customer migration strategies are just as important as physical rollouts
When the infrastructure is underperforming
This dynamic becomes particularly visible when projects underperform. Drahi’s German fiber optic company, OXG Glasfaser, has so far reached around 500,000 of the planned 7 million households. While delivery challenges play a role, adoption also depends on how effectively services are marketed and sold at the local level. The infrastructure alone does not guarantee acceptance.
Customer service exacerbates the problem. The European Commission estimates that dissatisfaction-related changes in the telecommunications industry cause billions of euros in indirect costs every year. Poor service increases churn, increases acquisition costs and reduces long-term returns. These losses are rarely at the forefront of investor presentations, but they do have a significant impact on valuations.
Automation is not a panacea
Automation and artificial intelligence are often presented as remedies. AI-driven customer support promises to increase efficiency, but there is evidence of limitations. Gartner research has repeatedly shown that the use of AI in customer service delivers limited benefits without simultaneously redesigning frontline processes and operating models. Technology reinforces existing strengths or weaknesses rather than correcting them.
Entrepreneurs with experience in sales tend to approach automation pragmatically. AI is used to assist agents rather than replace judgments. Data flows into training and does not serve as a blunt disciplinary tool. This reflects an understanding that customer relationships are fragile and that short-term efficiencies can cause long-term damage if handled incorrectly.
The forgotten human cost
There is also a work dimension that is still underestimated. Sales and customer service platforms employ hundreds of thousands across Europe. According to Eurofound, these positions have some of the highest turnover rates in the services sector. Retention strategies are therefore not only social but also economic considerations. Replacing a single call center agent can cost thousands of dollars when recruiting and training are taken into account.
As European telecom companies face higher interest rates and slower growth, attention will continue to focus on deleveraging and asset sales. This focus is understandable. However, there is a risk that an important point is being overlooked. The long-term health of the sector depends on both how networks are sold and maintained, and who owns them. While fiber and spectrum dominate the headlines, implementation is happening elsewhere, in places that rarely get public attention.
