EXCLUSIVE Europe’s telecommunications companies want US technology giants to help fund network costs

BRUSSELS, November 29 (Reuters) – US technology giants should bear some of the cost of developing Europe’s telecommunications network because they use it so much, CEOs of Deutsche Telekom (DTEGn.DE), Vodafone (VOD.L) and 11 other major IT said European telecom companies on Monday.

The call from CEOs comes when the telecom industry faces massive investments in 5G, fiber and cable networks to tackle data and cloud services provided by Netflix (NFLX.O) and Google’s (GOOGL.O) YouTube and Facebook (FB.O).

Investment in Europe’s telecommunications sector rose to 52.5 billion euros ($ 59.4 billion) last year, the highest level in six years.

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“A large and growing share of network traffic is generated and monetized on major technology platforms, but it requires continuous, intensive network investment and planning of the telecommunications sector,” the CEOs said in a joint statement seen by Reuters.

“This model – which enables EU citizens to enjoy the fruits of the digital transformation – can only be sustainable if such large technological platforms also contribute reasonably to network costs,” they said.

CEOs did not name any technology companies, but Reuters understands that US-listed giants such as Netflix and Facebook are companies they have in mind.

Technicians working on top of transmitter antennas are seen on a relay mast for mobile phone networks in Lambres-lez-Douai, France, September 30, 2020. REUTERS / Pascal Rossignol

Signatories to the letter include CEOs of Telefonica (TEF.MC), Orange (ORAN.PA), KPN (KPN.AS), BT Group (BT.L), Telecom Austria (TELA.VI), Vivacom, Proximus (PROX) .BR), Telenor (TEL.OL), Altice Portugal, Telia Company (TELIA.ST) and Swisscom (SCMN.S).

CEOs also criticized high-spectrum prices and auctions, used by EU governments as cash cows, and said that these artificially force unsustainable players into the market.

EU lawmakers’ attempts to shelve surcharges on calls within the EU were also briefed by CEOs, who see this sector as a source of revenue for business users.

“We estimate that they will forcibly remove over € 2 billion in revenue from the sector over a 4-year period, equivalent to 2.5% of the sector’s annual investment capacity for mobile infrastructure,” the companies said.

EU legislators must discuss their proposal with EU countries before it can be adopted and may struggle to find agreement.

($ 1 = 0.88839 euros)

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Reporting by Foo Yun Chee; Editing Toby Chopra

Our standards: Thomson Reuters Trust Principles.

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