TelecomTV TelecomTV
  • News
  • Videos
  • Channels
  • Events
  • Network Partners
  • Industry Insights
  • Directory
  • Newsletters
  • Open RAN
  • Digital Platforms and Services
  • 5G
  • Access Evolution
  • Private Networks
  • Cloud Native
  • Edge
  • Open Networking
  • Sustainability
  • AI, Analytics and Automation
  • 6G Research and Innovation
  • Security
  • More Topics
  • Network Partners
  • Industry Insights
  • Directory
  • Newsletters
  • |
  • About
  • Contact
  • |
  • Connect with us
  • 5G
  • 6G Research and Innovation
  • Access Evolution
  • AI, Analytics and Automation
  • Cloud Native
  • Digital Platforms and Services
  • Edge
  • Open Networking
  • Open RAN
  • Private Networks
  • Security
  • Sustainability
  • Connect with TelecomTV
  • About
  • Privacy
  • Help
  • Contact
  • Sign In Register Subscribe
    • Subscribe
    • Sign In
    • Register
  • Search

Digital Platforms & Services

Digital Platforms & Services

Europe’s Internet ecosystem: A 72bn boost to GDP and 840k new jobs are within reach if gaps in network costs are tackled

Via ETNO

May 2, 2022

Brussels, 2 May 2022 – Today, tech giants do not contribute a fair share to the deployment of telecom networks, while generating network-related costs of tens of billion euros. This weakens Europe’s capacity to swiftly achieve connectivity targets. Addressing this through policy action could unlock socio-economic benefits for Europe, including €72bn GDP growth, an additional 840k jobs in 2025 and cuts to CO₂ emissions.

The findings have been published today in the report “Europe’s internet ecosystem: socio-economic benefits of a fairer balance between tech giants and telecom operators”, prepared by international consulting firm Axon Partners Group Consulting for leading telecom association ETNO.

The problem: is everybody contributing their fair share?

Europe has the objective to achieve gigabit connectivity and 5G for all by 2030. The report shows that European telcos have invested over €500bn in fixed and mobile networks in the past 10 years. On the contrary, the top 6 tech giants have generated over 55% of all telecom networks’ traffic, but they have made “little or no financial contribution to the development of national networks”.

The report finds that European telcos are currently unable to recover these costs due to asymmetric bargaining power favouring big tech as well as the lack of a level regulatory playing field: essentially, Internet traffic markets are unbalanced. The report also refers to newly unveiled data by consulting firm Frontier Economics, which estimates that traffic driven by tech giants alone could generate network costs of at least €15bn, if considering incremental costs, or of at least €36bn, if considering total costs.

The consequences: slower 5G/FTTH roll-out, suboptimal QoS, more CO₂

The report shows that this unbalance has consequences. First, this contributes to making European telcos financially weaker, which impairs their ability to speed up gigabit roll-out: for example, the total market capitalization of Europe’s top 8 telcos is €0,24tn, as opposed to €7.11tn for the top 6 tech giants. Second, Quality of Service and innovation could be improved with more investment. Last, in absence of meaningful contributions by tech giants, the shift to greener networks is slower, with impacts on CO₂ emissions.

A fairer ecosystem: a €72bn GDP growth with positive social and environmental impacts

Axon estimates that, taking as a reference an illustrative annual contribution of €20bn to network costs by tech giants, the European Internet ecosystem could unlock significant opportunities. Up to €72bn could be added to GDP and 840k jobs created in 2025. Similarly, energy consumption for the sector could be reduced by 28% and the carbon footprint would shrink by as much as 94%.

Possible solutions: regulatory action to address unbalanced IP markets

Urgent and targeted regulatory action is required to address serious imbalances in Internet traffic markets and unlock socio-economic opportunities for citizens and businesses. This should be done within the framework of Europe’s Open Internet principles, while ensuring that all consumers continue to benefit from the full extent of ever-evolving network access and quality.

According to the Report, solutions could build on introducing a clear obligation to negotiate with Internet Service Providers. This would help ensure the fairness of commercial negotiations with big tech companies, who currently enjoy disproportionate bargaining power. The measures would be in the spirit of the newly established Digital Markets Act, while potentially building on principles in existing EU frameworks such as: the Electronic Communications Code, the Broadband Cost Reduction Directive and dispute resolution mechanisms (e.g. the ADR in the Copyright Directive or in the EU approach to Essential Patents).

Comments by ETNO and Axon

Lise Fuhr, Director General of ETNO, said: “The EU has been determined in tackling power imbalances in the online and tech space. With today’s report, we want to launch an open dialogue with policymakers, consumers and tech companies on how to address the specific imbalances in internet traffic markets. This is not a technical issue: it is about our ability to put Europe at the forefront of the global 5G and FTTH race”.

Alfons Oliver, Partner of Axon, said: “The European Commission has recently acknowledged the need to develop adequate frameworks for tech firms to contribute their fair share to the development of telecoms infrastructure. Time has now come for EU legislators to make it happen, unlocking the important benefits this will bring to European society”.

*

The report is available at this link. 

Related Topics
  • 5G,
  • Access Evolution,
  • Digital Platforms & Services,
  • Europe,
  • Industry Associations,
  • Telco & CSP,
  • Tracker

More Like This

Security

What’s up with… BT & MTN, Quad Nations & Open RAN, Telekom Austria

May 26, 2022

Security

British government cites security concerns as it probes Drahi’s BT stake and the sale of Newport Wafer Fab

May 26, 2022

Digital Platforms & Services

Broadcom to Acquire VMware for Approximately $61 Billion in Cash and Stock

May 26, 2022

Digital Platforms & Services

Broadcom confirms $61 billion offer to buy VMware

May 26, 2022

Security

BT and MTN Business form strategic alliance to enhance communications services in Africa

May 26, 2022

This content extract was originally sourced from an external website (ETNO) and is the copyright of the external website owner. TelecomTV is not responsible for the content of external websites. Legal Notices

Email Newsletters

Stay up to date with the latest industry developments: sign up to receive TelecomTV's top news and videos plus exclusive subscriber-only content direct to your inbox – including our daily news briefing and weekly wrap.

Subscribe

Top Picks

Highlights of our content from across TelecomTV today

9:15

DSP Leaders World Forum 2022 Interview: Mattias Fridström, Arelion

11:34

Neos Networks, "the best kept secret in telecoms"?

46:31

Is hybrid cloud still the optimum strategy for telcos?

2:05

Deutsche Telekom: supporting the grid’s evolution

TelecomTV
Company
  • About Us
  • Media Kit
  • Contact Us
Our Brands
  • DSP Leaders World Forum
  • Great Telco Debate
  • TelecomTV Events
Get In Touch
[email protected]
+44 (0) 207 448 1070
Connect With Us
  • Privacy
  • Cookies
  • Terms of Use
  • Legal Notices
  • Help

TelecomTV is produced by the team at Decisive Media.

© Decisive Media Limited 2022. All rights reserved. All brands and products are the trademarks of their respective holder(s).