European Telecommunication Companies Ask US Big Tech To Share 5G Network Investment Costs, Here's Why

JAKARTA – US Big Tech is required to bear most of the costs of developing telecommunications networks in Europe. So far they are considered to use the network so large, said the chief executive of Deutsche Telekom, Vodafone and 11 other major European telecommunications companies on Monday, November 29 as quoted by Reuters.

The CEO's proposals come as the telecommunications industry faces massive investments in 5G, fiber, and cable networks to address the data and cloud services provided by Netflix and Google's YouTube, and Facebook.

Investment in Europe's telecommunications sector rose to 52.5 billion euros (IDR  854.5 trillion) last year, the highest in six years.

"A large and increasing proportion of network traffic is generated and monetized by large technology platforms, but requires ongoing and intensive network investment and planning by the telecommunications sector," the CEOs said in a joint statement reported by Reuters.

“This model – which allows EU citizens to enjoy the fruits of digital transformation – can only be sustainable if the big technology platforms also contribute equitably to network costs,” they said.

The CEOs did not name the tech company, but Reuters estimates that US-listed giants such as Netflix and Facebook are the companies they alluded to.

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

CEOs have also criticized high-spectrum prices and auctions, which EU governments use as cash cows, saying they artificially force unsustainable entrants into the market.

Efforts by EU lawmakers to remove surcharges on intra-EU investments have also received little attention from CEOs who see the sector as a source of revenue for business users.

"We estimate that they will forcibly remove more than 2 billion euros of revenue from the sector in a 4-year period, which is equivalent to 2.5% of the sector's annual investment capacity for mobile infrastructure," the company said.

EU lawmakers will have to discuss their proposals with EU countries before it can be adopted and may struggle to find an agreement.