Le big tech they should take charge of some of the development costs of European telecommunications networks, as they make too much use of it. It is the request of 16 providers European telecommunications – including Deutsche Telekom, Orange, Telefonica, Fastweb and Telecom Italia – so that web giants – such as Google, Amazon, Apple, Meta, Netflix and Microsoft – bear part of the costs of creating 5G networks and of those in fiber octave given the sheer amount of global internet traffic they carry on their telecommunications networks.
The appeal of the 16 general directors comes while the European Commission prepares to launch next year "wide consultation" by both sides on the possible contribution of technology companies to the costs of telecommunications networks (before presenting a legislative proposal). As also confirmed by the Commissioner for the Internal Market of the European Commission Thierry Breton.
But big techs have rejected such requests, saying they are already investing in equipment and technologies to deliver content more efficiently.
Why should Big Tech contribute to network costs?
“We believe that the major traffic generators should contribute fairly to the significant costs they currently impose on European networks,” the CEOs of the companies said. European telcos in an early release from Reuters. “A fair contribution would send a clear financial signal to streamers regarding the data growth associated with their utilization of scarce network resources.”
The underlying idea of this request, which has been going on for months, is that telecommunication operators alone cannot support the important investments needed (estimated at 50 billion euros a year) to adapt networks to traffic growth; and large technology companies, without a performing and distributed network, could not guarantee their services. Reason why they should pay a contribution, according to logic yet to be defined. Among the reasons also the energy crisis and climate change goals.
European TLCs: "Costs for 5G and optical fiber too high"
“Design and construction costs are increasing. The prices of fiber optic cables, for example, have almost doubled in the first half of 2022. Likewise, the increases in the prices of energy and other productive factors are hitting the connectivity sector”, the CEOs said.
“We need to act quickly: Europe has lost many of the opportunities offered by the Internet for consumers. Now he must quickly build forces for the era of gods metaverse“, they continued. “For this to happen and be sustainable over time, we believe that the major traffic generators must contribute fairly to the significant costs they currently impose on European networks”.
5G and fiber optic costs: what would happen with cost sharing?
Over the past decade, network operators have invested over 500 billion in the development of their fixed and mobile telecommunications networks in Europe, but the economic contribution of Big Tech (Meta, Google, Apple, Amazon, Microsoft, Netflix), which on those same networks generate over 55% of the total traffic contribute "little or nothing” to their financing. It emerges from the analysis carried out by Axon Partners for Ethno, the European telco association, which highlights how the activity of Big Tech currently costs European operators up to 36-40 billion euros a year.
According to the study, a annual contribution of 20 billion euros by the web giants to the development of telecommunications infrastructure in the EU would increase GDP up to 72 billion euros by 2025, also boosting employment with the creation of 840 jobs a year. The operators then cite, as a consequence, also positive effects both on the user experience and on the levels of innovation and a strong reduction in energy consumption and carbon emission levels.
Meanwhile, Tim pays the installment of 1,7 billion
Even Tim among the signatories. The telecommunications operator must pay the amount relating to the payment by 30 September maxi installment of 1,7 billion euro (in one go) for the assignment of frequencies in the 5G spectrum, as required by the 2018 budget law. Therefore, without the required installments. Faced with a hypercompetitive context of price pressure, the former monopolist had asked for a 9-year extension for the disbursement, as did other operators. But nothing to do, the Government had not accepted this request, on the contrary this had prompted the representatives of the Assotelecomunicazioni-Asstel category to continue with the requests to the Mise to open separate tables to arrive at more solutions. But with the political crisis every possibility has vanished and now there is no time to start a discussion with the new government.
But the requests don't stop there. The whole sector of telecommunications companies is moving to ask the new executive to include them among the sectors considered "energy-hungry" to access the discounts on bills. In addition there is also the issue of the rise in the cost of money and the impact on financial debt. However, as reported in Il Sole 24 Ore, Adrian Calaza (CFO of Tim) points out that the operator's debt is mostly in fixed-rate instruments and that for the next 12-15 months there is no need to repay market for a refinancing. However, the problem seems to be another one: Italy and Germany are the two European states where operators paid more for frequencies when "prices were very different" and "zero rates", Calaza points out.
