The CEOs of Deutsche Telekom, Vodafone, and 11 other major European telecom operators said on Monday that US technology giants should bear part of the cost of European telecom network deployment. These telecom companies claim that US technology giants frequently use European telecom networks. To this end, they should contribute to its construction. These CEOs made the call as the telecommunications industry is facing huge investments in 5G, fiber optic, and cable networks. These investments are necessary in order for them to cope with data and cloud services. Most of these high demanding services are provided by Netflix and Google’s YouTube, and Facebook.
Last year, investment in the European telecommunications industry hit 52.5 billion euros ($59.4 billion), a six-year high. According to Reuters, these CEOs stated in a joint statement: “A large part of the network traffic is generated and profitable by large technology platforms, and the proportion is still increasing. However, this requires continuous and intensive efforts by the telecommunications sector, network investment and planning.”
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They said: “This model enables EU citizens to enjoy the fruits of digital transformation. It is only sustainable if large technology platforms also share the costs of the network fairly”. These CEOs did not directly name any technology company. However, according to Reuters, their targets include US internet giants such as Netflix and Facebook.
Several European telecommunication companies support the call
Other lists of signatories for this open letter include Telefonica, Orange, KPN, BT, Telekom Austria, Vivacom, Proximus, Telenor, Altice Portugal, Telia Company, and Swisscom (Swisscom). These CEOs also criticized the ultra-high spectrum prices and auctions that are used as cash cows by the EU government. They claim that these actions artificially force unsustainable participants into the market.
European Union lawmakers tried to abolish call surcharges between EU countries. However, the CEOs did not take the call seriously because it is a source of income for business users. The aforementioned telecom company said
“We estimate that this will force the telecom industry to reduce revenue by more than 2 billion euros within 4 years. This is equivalent to 2.5% of the industry’s annual investment capacity in mobile infrastructure”.
EU lawmakers must discuss their proposals with EU countries before they can adopt them. However, it may be very difficult to reach an agreement. Obviously, large technology firms will not want to be part of the network construction. This will mean spending more money. This is only a call by European telecom service providers. The call may not even see the light of day.