US tech giants should bear partial cost of developing EU telecom networks: European telcos

On Monday, the CEO of Deutsche Telekom, Vodafone, and 11 other major European telecoms companies said, U.S. tech giants should bear some of the costs of developing telecom networks in Europe based on the fact that they use them so heavily.

The statement by the CEOs comes at a time when the telecoms industry is facing massive investments for upgrading networks including 5G, fiber and cable to cater to increased bandwidth of cloud services.

In 2020, iinvestments in Europe’s telecom industry rose to $59.4 billion (52.5 billion euros).

“A large and increasing part of network traffic is generated and monetized by big tech platforms, but it requires continuous, intensive network investment and planning by the telecommunications sector,” said the CEOs in a joint statement.

“This model – which enables EU citizens to enjoy the fruits of the digital transformation – can only be sustainable if such big tech platforms also contribute fairly to network costs”.

Although the statement did not specifically mention any tech firms by name, it is very likely that they U.S.-listed tech giants including Facebook and Netflix are companies they have in mind.

Signatories to the letter include the CEOs of Orange, Telefonica, KPN, Telekom Austria, BT Group, Vivacom, Telenor, Proximus, Telia Company, Swisscom, and Altice Portugal.

The CEOs were also critical of high spectrum prices and auctions set by EU governments saying they are cash cows and act as entry barriers for new entrants into the market.

The attempt by EU lawmakers to scrap surcharges on intra-EU calls also attracted criticism from the CEOs who see this sector as a source of revenue from business users.

“We estimate that they would forcibly remove over 2 billion euros revenues from the sector in a 4 year period, which is equivalent to 2.5% of the sector’s yearly investment capacity for mobile infrastructure,” said the companies.

EU lawmakers will have to discuss their proposal with EU countries before it can be adopted.

($1 = 0.8839 euros)

Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

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