The European Commission’s proposed Digital Networks Act Regulation (COM(2026) 16) (DNA), published in January 2026, would replace the EU's fragmented telecoms rules with a single regime. The proposal is now being negotiated between the European Parliament and the Council, with adoption expected in late 2026 or early 2027. While its scope and content may change, its direction is clear enough for businesses to begin assessing its impact and planning accordingly.
Introduction
Discussion of Europe’s technological competitiveness has focused largely on AI, but attention is increasingly turning to the network infrastructure on which AI and other digital services depend. The Commission itself describes resilient, advanced digital infrastructure as “critical for enabling the adoption of AI, cloud, space and other innovative technologies”, and telecoms operators and policymakers argue that Europe’s economic objectives cannot be met without substantial investment in 5G, 6G and fibre networks. The GSM Association, the global trade body for the mobile industry, estimates that Europe faces a €200 billion shortfall in upgrading its networks to leading global standards. Europe is widely regarded as lagging North America and East Asia on advanced network deployment.
The DNA would merge the European Electronic Communications Code (Directive (EU) 2018/1972), the Regulation establishing the Body of European Regulators for Electronic Communications (BEREC), the Radio Spectrum Policy Programme and core parts of the Open Internet Regulation into a single, directly applicable Regulation, and would also amend parts of the ePrivacy Directive.
The Commission gives three main reasons for the change. Firstly, the market remains fragmented along national lines, leaving European operators at a disadvantage against larger rivals elsewhere. Secondly, the rules are spread across several separate EU laws, each with its own legal form and scope, and Member States have implemented them inconsistently. Thirdly, the shift to fibre, 5G, 6G and cloud-based networks, with rising data traffic and demand for gigabit connectivity, has outpaced the existing framework. A single Regulation would apply the same rules in every Member State and encourage investment in advanced, resilient networks.
Objectives of the DNA
The DNA is more than a consolidation of existing telecoms rules. It is intended to encourage investment in larger, cross-border operators and more secure networks, and three objectives are central to that aim.
1. Spurring cross-border consolidation
The DNA seeks to support scale through maximum harmonisation and a Single Passport, under which a provider operating in several Member States would notify a single national regulator. The DNA does not change merger control: telecoms mergers will still be reviewed by the Commission or national competition authorities under the existing rules. However, those authorities are likely to come under political pressure to take the DNA’s pro-consolidation aims into account. There are already signs that they are less inclined to follow their traditional approach of resisting mergers that reduce the number of operators in a national market (for example, from four mobile networks to three) and are more willing to clear such deals, subject to conditions.
2. Harmonising spectrum management
Spectrum management has historically been a national matter, producing a patchwork of deployment timelines and differing costs across Member States. The DNA would move towards a more unified EU-wide approach, including a Commission veto over national draft spectrum assignment measures, binding EU radio spectrum roadmaps and a single EU authorisation framework for satellite spectrum.
3. Securing critical infrastructure
The DNA treats electronic communications networks as essential infrastructure. A new Office for Digital Networks would replace the existing BEREC Office based in Riga, Latvia, and would support BEREC, in particular in adopting, within 12 months of the DNA entering into force, a Union Preparedness Plan for Digital Infrastructures - a central security and resilience initiative proposed under the DNA, covering network assessments, operational recommendations and crisis management. The DNA would also build harmonised supply chain security requirements into the general authorisation regime (under which providers are entitled to offer networks and services), aligned with the NIS2 Directive and the proposed Cybersecurity Act Revision. The Cybersecurity Act Revision would, in turn, require the phase-out of components from designated high-risk suppliers in mobile, fixed and satellite networks. No supplier has yet been designated, but the measure is widely expected to affect Huawei and ZTE, which supply around a third of 5G radio access equipment in the EU.
Subsea cable security is being addressed through separate EU initiatives (see “Subsea cable security” below).
Balancing sovereignty: infrastructure vs applications
- AI and applications: Europe remains heavily reliant on US hyperscalers for cloud and compute, US and increasingly Chinese developers for foundation models, and Asian supply chains for chips. Wider EU policy seeks to foster stronger homegrown AI and technology ecosystems, while recognising that application software will continue to operate and move globally; the DNA contributes by strengthening the networks on which those ecosystems depend.
- Physical networks: alongside the investment gap, Europe faces slower 5G deployment, very limited standalone 5G coverage and declining operator revenues in real terms. The DNA aims to build robust, high-speed networks that reduce strategic dependencies and can support future technologies, including AI.
More broadly, upgraded networks are seen as a precondition for running next-generation industrial AI, smart cities and autonomous systems within the EU, rather than relying on processing in non-EU clouds.
Issues to watch
The Fair Share debate
A continuing point of contention is whether large technology companies that generate significant traffic should contribute to network costs. The DNA does not impose network fees, but commentators note that its voluntary dispute conciliation mechanism could reopen the debate, and operators and platforms will watch the negotiations closely.
The EU 2030 Digital Decade targets
The DNA forms part of the EU’s Digital Decade Policy programme, whose 2030 objectives include gigabit connectivity for all and high-speed 5G coverage in all populated areas, tracked in the Commission’s annual State of the Digital Decade report. The DNA would also require the move from copper to full fibre to be completed by 31 December 2035, with Member States submitting national transition plans by 31 October 2029, at significant cost to operators.
Subsea cable security
Commission Recommendation (EU) 2024/779 on Secure and Resilient Submarine Cable Infrastructures was followed by the EU Action Plan on Cable Security on 21 February 2025. An expert group of Member States, the Commission and the EU Agency for Cybersecurity published EU-wide mapping, risk assessment and stress-test guidance in October 2025, and a Cable Security Toolbox and list of Cable Projects of European Interest in February 2026. Owners, operators and users of subsea capacity should follow how these measures feed into any binding requirements.
What this means for businesses
Although the DNA’s final shape is not yet settled, operators, investors, infrastructure owners, tech platforms and enterprise customers should begin considering the following:
- Deal strategy and M&A: reassess consolidation, partnership and cross-border opportunities (including the Single Passport), bearing in mind that merger control still applies, and factor regulatory change into valuation, timelines, conditionality and due diligence.
- Spectrum and licensing: monitor proposals on spectrum auctions and licensing, which may affect rollout costs and timing and the value of existing licences.
- Security and resilience: prepare for potentially stricter obligations for core networks and critical infrastructure such as subsea cables, and consider the governance, incident response and supply chain diligence these may require.
- Contracts and procurement: check that connectivity, cloud, infrastructure and supply agreements deal adequately with change in law, cost allocation, security requirements and change of control, and build resilience and exit options into procurement.
- Data, sovereignty and network costs: consider how sovereignty objectives and the Fair Share debate (see “The Fair Share debate” above) may affect data location expectations, network cost contributions and commercial arrangements with operators.
- Legislative engagement: follow the negotiations and consider engaging, directly or through industry bodies, while the text can still be shaped.
The impact will depend on each business’s sector, footprint and contractual position, but those with EU network exposure should treat the DNA as a strategic planning and investment issue, not just a compliance matter.
If you would like to discuss these developments and what they could mean for your business, please get in touch with Tim Wright, Alex Haffner, or another member of our Technology team.
