When Patrick Drahi revived the sale of a stake in a German fibre network this month, the headlines focused on familiar themes. High leverage typical of the sector and asset disposals, reflecting a large debt position built during a decade of unusually cheap capital.
It is a narrative that fits comfortably with how European telecoms is often described, as an industry shaped by capital intensity, long investment cycles and complex balance sheets.
Yet, this focus on ownership and balance sheets hides an often forgotten reality: telecom networks do not generate revenue simply by existing. Fibre in the ground and spectrum in the air only become profitable through a dense commercial layer that sits between operators and customers. Sales platforms, distribution partners, call centres, and customer acquisition engines are what turn capital investment into cash flow. This machinery is rarely discussed, despite being decisive in whether telecom strategies succeed.
The commercial layer 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 operating expenditure for European telecom operators. In competitive markets such as Sweden, the UK, and the Netherlands, annual churn rates for mobile customers routinely exceed 20 percent. Under these conditions, profitability depends less on network coverage than on how efficiently services are sold, retained, and serviced.
Jason Grannum and the execution gap
This is where a different kind of telecom entrepreneur operates. Jason Grannum built his career in Sweden not by owning networks or bidding for spectrum, but by building and scaling sales and distribution businesses embedded in the industry’s commercial infrastructure, achieving significant commercial scale in one of Europe’s most competitive markets.
Operating as a mobile virtual network operator via a licensed partner, his businesses delivered fully branded services while relying on Tele2, one of Sweden’s leading telecommunications companies, for nationwide network coverage and performance. The arrangement illustrates how value in mature telecom markets is often created without asset ownership, through execution at scale. Recruitment, incentives, compliance, and performance tracking were treated not as overhead, but as core strategic levers, managed with the discipline typically associated with established operators rather than entrepreneurial start-ups.
Over time, this execution-led model became repeatable. Grannum has gone on to co-build multiple businesses within the same commercial layer of the telecom ecosystem, working closely with large operators and regulated partners. In markets defined by thin margins and constant churn, that kind of durability is itself a marker of strategic relevance.
Connectivity does not guarantee returns
Sweden offers a useful illustration of why this matters. It ranks among Europe’s most connected countries, with fibre-to-the-home coverage above 80 percent and some of the highest mobile data usage rates in the EU. At the same time, average revenue per user remains relatively low. According to the Swedish Post and Telecom Authority, ARPU levels lag behind those of Germany and France. For operators, profitability therefore hinges on operational efficiency rather than pricing power.
In this environment, sales execution becomes essential. Call centre productivity, adherence to consumer protection rules, and staff retention directly affect margins. A poorly managed distribution channel can erase gains achieved through network optimisation. Conversely, a disciplined sales operation can sustain revenues even when subscriber growth slows.
The boardroom blind spot
This operational reality often sits uncomfortably with how telecom leadership is structured. Research by McKinsey shows that senior executives devote disproportionate attention to capital allocation and regulatory strategy, while frontline sales and service performance is delegated downward or outsourced. The result is a persistent gap between boardroom priorities and customer experience. That gap tends to widen in large, leveraged groups where refinancing and restructuring dominate management agendas.
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 headroom is limited.
Lessons from disruption beyond pricing
A different but related lesson can be drawn from Xavier Niel, whose disruption of the French market is often attributed to pricing alone. Yet Free Mobile’s impact rested as much on commercial execution as on low tariffs. Lean distribution, simplified offers, aggressive customer acquisition, and an early embrace of online sales allowed the company to scale rapidly without the overheads that burdened historic players. Network investment mattered, but it was the sales model that translated that investment into market share.
Take-up rates lag
Across Europe, similar patterns emerge. In the UK, mobile virtual network operators now account for more than 15 percent of mobile connections, according to Ofcom. These companies own no infrastructure. Their competitiveness rests almost entirely on distribution partnerships and customer service efficiency. In fibre markets, take-up rates still lag coverage by wide margins. Across the EU39 region, only about 53 percent of homes passed with FTTH/B are actually connected, even though coverage has reached roughly 75 percent. In some countries, the gap is far wider: France reports take-up near 78 percent once fibre is available, while Germany and Italy remain near 25 percent. These differences point to how sales execution and
customer migration strategies matter as much as physical rollout
When infrastructure underperforms
These dynamics become especially visible when projects underperform. Drahi’s German fibre venture, OXG Glasfaser, has so far reached around 500,000 homes out of a planned 7 million. While deployment challenges play a role, uptake also depends on how effectively services are marketed and sold at the local level. Infrastructure alone does not guarantee adoption.
Customer service compounds the issue. The European Commission estimates that dissatisfaction-driven switching imposes billions of euros in indirect costs on the telecom sector each year. Poor service increases churn, raises acquisition costs, and erodes long-term returns. These losses rarely feature prominently in investor presentations, yet they materially affect valuations.
Automation isn’t a silver bullet
Automation and artificial intelligence are often presented as remedies. AI-driven customer support promises efficiency gains, but evidence suggests limits. Gartner research has repeatedly shown that deploying AI in customer service delivers limited gains unless frontline processes and operating models are redesigned alongside it. Technology amplified existing strengths or weaknesses rather than correcting them.
Entrepreneurs grounded in sales and distribution tend to approach automation pragmatically. AI is used to assist agents rather than replace judgement. Data informs training rather than serving as a blunt disciplinary tool. This reflects an understanding that customer relationships are fragile, and that short-term efficiency gains can create long-term damage if mishandled.
The forgotten human cost
There is also a labour dimension that remains underappreciated. Sales and customer service platforms employ hundreds of thousands across Europe. According to Eurofound, these roles have among the highest turnover rates in the services sector. Retention strategies are therefore not only social considerations, but economic ones. Replacing a single call centre agent can cost several thousand euros once recruitment and training are factored in.
As European telecoms confront higher interest rates and slower growth, attention will continue to focus on debt reduction and asset sales. That focus is understandable. But it risks missing an important point. The sector’s long-term health depends as much on how networks are sold and serviced as on who owns them. Fibre and spectrum may dominate headlines, but execution happens elsewhere, in places that rarely attract public attention.
Read more:
Telecoms’ debt problem hides a deeper truth about how the industry really works