EU Telcos Want Big Tech and Streamers to Invest in Their Networks

Big Tech and video streaming companies should foot at least some of the almost $30 billion they are costing European telecommunications groups for their dominance of network infrastructure, a new industry report says, according to a report in the Financial Times Sunday (May 1).

Amazon, Facebook owner Meta and Netflix make up more than 55% of all traffic on the region’s mobile and broadband networks, at a cost of between $15.8 billion and $29.4 billion, the report says, citing research by the European Telecommunications Network Operators’ Association (ETNO) and conducted by consultancy firm Axon.

The report says a contribution of $21 billion to telecom companies to pay for and increase network investment could create 840,000 new jobs by 2025 and “significantly reduce energy consumption in the sector,” because it would lead to increased spending on 5G and fiber.

“We want to launch an open dialogue with policymakers, consumers and tech companies on how to address the specific imbalances in internet traffic markets,” said Lise Fuhr, director-general of ETNO, in the report.

Late last year, a South Korea court recently ordered Netflix to pay for a surge in traffic over SK Broadband’s network sparked by the success of its series Squid Game.

European telecommunications groups invested $525 billion in the past decade to upgrade and improve their fixed and mobile networks. The top eight telecom groups have a market capitalization of more than $252 billion, compared to $7.35 trillion in market capitalization for the top six tech groups.

Related: Charter, Comcast Partner for Next-Gen Streaming Platform

Last month, Charter Communications, Inc. and Comcast Corp. formed a 50-50 joint venture to develop a new streaming platform that will work on 4K streaming devices and smart TVs.

Comcast has about 57 million customers in the United States and Europe, according to the company. Charter reports having about 32 million customers.

Comcast’s contribution to the joint venture, the companies said, will include its Flex streaming platform; retailing of XCLass TVs; and distribution of the Xumo streaming service, which it acquired in 2020.

Charter will contribute $900 million over five years under the agreement. XClass TVs will be sold through retailers and “potentially” by the two cable system operators, the release states.  Xumo, the release states, will remain free.