# European telcos set to win fight with Big Tech, could set global agenda Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-10-03 Category: Uncategorized Category URL: https://financedigest.com/category/uncategorized Meta Title: EU Telecom Battle: Big Tech Network Cost Payments Imminent Meta Description: EU regulators poised to level playing field as telecoms win fight against tech giants to share network expenses. A global standard initiative in motion. URL: https://financedigest.com/european-telcos-set-to-win-fight-with-big-tech-could-set-global-agendahtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-09-30t170958z2lynxmpei8t0yzrtroptp4orange-belgium-1736815107201-compressed.jpg) By Foo Yun Chee and Supantha Mukherjee BRUSSELS/STOCKHOLM (Reuters) – European telecoms providers are set to win their decade-long fight to make Big Tech pay for network costs, thanks to sympathetic EU regulators and the bloc’s efforts to rein in U.S. tech giants, according to industry and regulatory sources, in the EU’s strongest move yet to [set a global standard](https://www.financedigest.com/finalised-pan-european-data-protection-laws-set-the-new-standard-for-a-privacy-friendly-business-environment.html "Finalised Pan-European data protection laws set the new standard for a ‘privacy-friendly’ business environment"). Deutsche Telekom, Orange, Telefonica, Telecom Italia and the big [operators say](https://www.financedigest.com/britain-sets-5g-goal-says-no-magic-number-of-operators.html "Britain sets 5G goal, says no ‘magic number’ of operators") it is all about a fair share contribution, especially as the six largest content providers account for just over half of data internet traffic. Alphabet Inc unit Google, Netflix Inc, Meta, Amazon.com Inc and other tech giants, however, reject the idea. Some dismiss it as an internet traffic [tax while one company even called it a bid](https://www.financedigest.com/germany-to-lower-sales-tax-on-gas-to-7-in-bid-to-relieve-consumers.html "Germany to lower sales tax on gas to 7% in bid to relieve consumers") to appropriate money from one industry to support the old guard. The battle to get [Big Tech](https://www.financedigest.com/startups-spring-from-ashes-of-big-tech-purge.html "Startups spring from ashes of Big Tech purge") to shoulder network costs has raged from South Korea to the United States. Four sources familiar with the [discussions say](https://www.financedigest.com/greece-britain-discussing-parthenon-sculptures-return-but-deal-not-close-athens-says.html "Greece, Britain discussing Parthenon Sculptures return but deal not close, Athens says") they believe the 27-country bloc, which has in recent years successfully passed landmark rules on privacy and other curbs on the power of U.S. tech giants, will have a new chance to set a [global standard on network costs](https://www.financedigest.com/september-tropical-cyclones-cost-global-economy-more-than-4bn-according-to-aon-catastrophe-report.html "September tropical cyclones cost global economy more than bn, according to Aon catastrophe report"). The situation that was unfair 10 [years ago today is simply unsustainable,” a top executive of a telecom company](https://www.financedigest.com/companies-that-dont-upgrade-their-financial-processes-this-year-will-get-left-behind.html "Companies that don’t upgrade their financial processes this year will get left behind") said. What has [changed is that for the first time](https://www.financedigest.com/a-time-of-change-how-artificial-intelligence-is-transforming-insurance.html "A time of change – how artificial intelligence is transforming insurance") we are doing it all together. [Big Tech](https://www.financedigest.com/tech-ceos-wax-poetic-on-ai-big-adds-to-sales-will-take-time.html "Tech CEOs wax poetic on AI, big adds to sales will take time") executives are girding for a fight. We cannot see any evidence of a failure in the telco [business model](https://www.financedigest.com/learning-from-the-disrupters-how-finance-brands-can-build-transformative-business-models.html "Learning from the disrupters – how finance brands can build transformative business models") … in a way that would justify [demanding a subsidy](https://www.financedigest.com/eu-demands-quick-fix-from-u-s-of-green-subsidy-law.html "EU demands quick fix from U.S. of green subsidy law") from other sectors,” said a source at a large tech company. “It’s extortion, not economics.” EU legislation providing a means to recover costs could result in a 3-billion-euro ($2.93 billion) [annual windfall for the telecoms industry](https://www.financedigest.com/savings-efficiencies-and-greater-reliability-in-entity-verification-processes-of-a-combined-annual-value-of-650m-to-the-financial-services-industry-identified-in-new-research-into-legal-entity-ident.html "Savings, Efficiencies And Greater Reliability In Entity Verification Processes Of A Combined Annual Value Of 0m To The Financial Services Industry Identified In New Research Into Legal Entity Identifiers"), according to Barclays. However, in what [telecom executives call](https://www.financedigest.com/emergency-call-services-telcos-urge-eu-to-protect-telecoms-networks-from-power-cuts.html "Emergency call services, telcos urge EU to protect telecoms networks from power cuts") the clearest sign that the sector may be winning over regulators, EU industry chief Thierry Breton has said he will seek feedback from both sides before drafting legislation. Once they start a thing like this, it [means it goes](https://www.financedigest.com/lloyds-goes-digital-but-what-does-that-mean-for-loyalty.html "LLOYDS GOES DIGITAL – BUT WHAT DOES THAT MEAN FOR LOYALTY?") ahead and that it is serious. This was an untouchable taboo six months ago,” said a telecoms [industry source](https://www.financedigest.com/german-new-passenger-car-registrations-up-3-in-august-industry-source.html "German new passenger car registrations up 3% in August – industry source"). Breton, a proponent of [European industrial](https://www.financedigest.com/advantech-opens-expanded-european-service-center-in-eindhoven-to-drive-industry-4-0-growth.html "Advantech Opens Expanded European Service Center in Eindhoven to Drive Industry 4.0 Growth") champions, however, will have to step up his pace to get legislation passed before his mandate ends in 2024. There is a huge imbalance in negotiating power as Big Tech has no [incentive to come to the table at all right now,” a spokesperson for the GSMA telecoms lobbying group](https://www.financedigest.com/incentive-fm-group-announces-latest-strategic-me-acquisition.html "INCENTIVE FM GROUP ANNOUNCES LATEST STRATEGIC M&E ACQUISITION") said. “So we need a legislative mechanism that makes them do that.” The commission is working to make sure all actors involved in data flows contribute to the [financing of connectivity infrastructure](https://www.financedigest.com/hiding-in-plain-sight-finance-as-critical-national-infrastructure.html "Hiding in plain sight – Finance as Critical National Infrastructure"), without undermining the concept of open internet, according to these sources familiar with the matter. NET NEUTRALITY [Google has been scathing of what it says is a “sender pays”](https://www.financedigest.com/contis-enables-google-pay-to-make-transacting-easier-and-more-secure.html "Contis enables Google Pay to make transacting easier and more secure") principle. Such a [move would disrupt the bloc’s net neutrality or open](https://www.financedigest.com/moving-past-regulation-the-future-of-open-banking.html "Moving Past Regulation: the future of open banking") internet access and hurt consumers, Matt Brittin, Google’s EMEA president, told a conference earlier this week. Telecoms operators have dismissed such worries. Telecom executives interviewed by Reuters said there is no plan to block traffic and that the goal is simply to ensure that the largest players contribute to [soaring network costs](https://www.financedigest.com/amazon-other-retailers-revamp-free-shipping-as-costs-soar.html "Amazon, other retailers revamp ‘free’ shipping as costs soar"). Any payment to [telecom operators could be restricted to only large content providers exceeding a set](https://www.financedigest.com/telecom-api-market-api-set-to-redefine-telecom-sector-as-telecom-2-0-gets-closer-to-reality.html "Telecom API Market – API Set to Redefine Telecom Sector as Telecom 2.0 Gets Closer to Reality") threshold, according to three sources familiar with the matter. A small company would not have to pay anything, they added. Some providers want to negotiate with [tech companies](https://www.financedigest.com/uk-to-fine-tech-companies-that-fail-to-remove-self-harm-material.html "UK to fine tech companies that fail to remove self-harm material") on market-specific deals, rather than make a blanket deal, the sources said. The [tech companies point to billions of dollars they have invested](https://www.financedigest.com/uks-dominos-expects-tech-investments-to-hit-2023-profit.html "UK’s Domino’s expects tech investments to hit 2023 profit") in building caches, data centers and subsea cables, and technology to deliver content more efficiently. We operate more than 700 caching locations in Europe, so when [consumers use their internet connection](https://www.financedigest.com/how-banks-can-prioritise-the-connected-consumer-in-light-of-shifting-cultural-norms.html "How Banks Can Prioritise the Connected Consumer in Light of Shifting Cultural Norms") to watch Netflix, the content doesn’t travel long distances,” a Netflix spokesperson said. To fulfill EU goals of having 5G everywhere and Gigabit home connections by 2030, [telecom companies would need to invest hundreds of billions of euros](https://www.financedigest.com/telecoms-group-orange-signs-sustainability-linked-refinancing-of-6-billion-euros-syndicated-credit-facility.html "Telecoms group Orange signs sustainability-linked refinancing of 6 billion euros syndicated credit facility") while carrying a high debt load. [Deutsche Telekom](https://www.financedigest.com/deutsche-telekom-reaches-majority-stake-in-t-mobile-u-s-ceo.html "Deutsche Telekom reaches majority stake in T-Mobile U.S. – CEO") has over 100 billion euros of debt while Telefonica owes over 40 billion euros. Two sources said that any new EU law would likely have constraints to make sure the [money goes into the network](https://www.financedigest.com/anti-money-laundering-mess-how-to-outsmart-villains-by-understanding-their-networks.html "Anti Money Laundering Mess? How to Outsmart Villains by Understanding Their Networks"), and not to pay down debt. ($1 = 1.0253 euros) (Reporting by Foo Yun Chee and Supantha Muherjee; editing by Kenneth Li and Richard Chang) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---