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Exclusive-D. Telekom, Vodafone, others want U.S. tech giants to help fund network costs -Breaking


© Reuters. FILE PHOTO – Technicians working at the top transmitting antennas can be seen in Lambres-lez-Douai (France), September 30, 2020. REUTERS/Pascal Rossignol


By Foo Yun Chee

BRUSSELS, (Reuters) – The U.S. technology giants must bear part of the cost of building Europe’s telecoms networks. They use them so extensively. Chief executives at Deutsche Telekom (OTC) and Vodafone (NASDAQ) said Monday.

As the telecom industry is facing massive investments in 5G, fibre, and cable networks for data and cloud services (NASDAQ :), and Google (NASDAQ :), the CEOs are making this call.

Last year’s investment in Europe’s telco industry reached 52.5 billion euros (59.4 Billion), a six-year peak.

In a statement jointly seen by Reuters, the CEOs stated that a large part of the network traffic generated by tech platforms is monetized. However, it takes continuous network investment and planning from the telecommunications industry.

“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,” they said.

Although they did not name any tech companies, Reuters understood that the CEOs had in mind U.S.-listed corporations such as Netflix or Facebook.

This letter was signed by the CEOs at Telefonica (NYSE) and Orange, KPN, BT Groups (LON :), Telekom Austria(OTC :), Vivacom (Vivacom), Proximus Telenor, Altice Portugal (Telia Company), and Swisscom.

High spectrum prices and auctions were also criticised by the CEOs. These are used as cash cows by EU governments to force unsustainable entrants onto the market.

EU lawmakers tried to repeal surcharges on intra EU calls, but the CEOs didn’t like this idea. They see it as a way for business users to make a profit.

According to the companies, they estimated that the industry would remove revenues of over 2 billion euros from it in 4 years. This is approximately 2.5% off the sector’s annual investments capacity for mobile infrastructure.

EU legislators must first discuss the proposal with EU country before it is adopted. This can prove difficult if there are not enough parties.

($1 = 0.8839 euros)

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