Tech or Telco investments weighs more?

Giant online platform Meta has entered debate on the fair contribution of content application companies (CAP) when says its investments into content drive telco’s business model.

21 March 2023 in Brussels Politico and European Telecommunications Network Operators’ Association (ETNO) hosted a debate titled „Telecoms Drumbeat for the Future of Connectivity” on fair contribution to network costs, just weeks after the European Commission launched a public consultation on the future of electronic communications networks.

Meta’s director Phillip Mallock rejected the idea of big European telcos that the handful of companies generating most data traffic should contribute more to infrastructure buildout via an extra network fee. According to Meta the so called fair contribution proposals don’t recognise huge investments of tech providers into content, although content drives the business model of telecom operators. Director Malloch said „a bit is a bit, wherever it comes from, but without CAPs’ „content bits” there would be less demand for high-speed, high-capacity networks.

And Meta had just announced a giant $19.2B investment for the Metaverse only this year, while CAPs have collectively invested over $880 billion in global digital infrastructure, including approximately $120 billion a year from 2018 to 2021. Meta leaders point out that they have been investing a lot in Europe and globally in infrastructure such as subsea cables bringing traffic closer to end users. They also cited an Analysys Mason report, which states that these investments by content and application providers save telco operators between $5 billion and $6.4 billion annually.

On the other side telecoms operators advocate for a regulatory framework to strengthen their position in commercial negotiations with big tech companies, and Roberto Viola, director-general of DG CNECT at the European Commission, seemed open to the idea of what he called fair contribution toward building a digital ecosystem in Europe.