Telecom providers want major tech companies like Alphabet’s Google, Meta, Amazon, Netflix, Apple and Microsoft, which account for more than half of internet data traffic, to fund the network upgrades.
European Union regulators are contemplating changes to their rules on mobile telecoms mergers and considering expanding telecoms regulations to require major tech companies to contribute to the costs of rolling out 5G networks.
The potential policy shift comes in response to long-standing appeals from major telecom operators like Deutsche Telekom, Orange, Telefonica, and Telecom Italia. These companies have argued that the current regulations, which generally discourage mergers that reduce the number of mobile operators in a market from four to three, hinder their ability to invest in next-generation network infrastructure.
The document, set to be presented by Commission Vice-President Margrethe Vestager on February 21 for stakeholder feedback, highlights the fragmented nature of the EU’s telecoms market, with around 50 mobile operators and over 100 fixed operators. This fragmentation, largely along national lines, may impede operators’ ability to achieve the scale necessary for investing in future networks, particularly for cross-border services. The paper raises the question of whether cross-border consolidation or other forms of cooperation could help operators gain sufficient scale without undermining competition in the market.
The document suggests that the current telecoms regulatory framework might need to be expanded due to the convergence of electronic communications networks and cloud services. This expansion would aim to create a level playing field and ensure equivalent rights and obligations for all digital network actors and end-users.
Telecom providers have also argued that major tech companies like Alphabet’s Google, Meta, Amazon, Netflix, Apple, and Microsoft, which account for more than half of internet data traffic, should contribute to the funding of network upgrades. This issue is part of the broader debate on how to finance the costly infrastructure required for 5G and future network technologies.
