Facebook-owner Meta Platforms has revealed that EU telecoms operators’ demand to share their network cost with Big Tech is not the solution to their financial problems and it also ignores tech companies’ hefty investments.
Capital expenditure of Meta Platforms was $9.22 billion for the fourth quarter and $32.04 billion for full year 2022, showing that it is one of the leading digital platforms with significant investment in network infrastructure.
Deutsche Telekom, Orange, Telefonica, Telecom Italia and other operators have lobbied for two decades for U.S. tech giants such as Facebook, Amazon, Google, Netflix, among others, to contribute to 5G and broadband roll-out.
European telecoms feel that Facebook and other digital platforms are thriving because their subscribers are using Internet data powered by their networks. Meta Platforms has generated revenue of $116.61 billion in 2022. Meta Platforms has 2.96 billion active customers on its major digital platforms such as Facebook, WhatsApp, Instagram, etc.
In Western Europe, traffic usage per smartphone is projected to reach 52 GB per month by 2028 – close to the usage in North America at that time. In Central and Eastern Europe, monthly average data traffic per smartphone is expected to increase from 13 GB to around 35 GB per month, according to Ericsson Mobility Report.
5G adoption across Europe lags behind its global peers, according to GSMA Intelligence report. In Q4 2022, 5G uptake in Europe accounted for 7.4 percent of total mobile connections, a substantial increase over the Q4 2021 level of 2.5 percent.
Across European countries, 5G adoption is at most 21 percent (Switzerland), compared to 43.1 percent in the United States, 42.4 percent in South Korea, China’s 36.3 percent, Australia’s 30.1 percent, and Japan’s 28.5 percent.
Mobile network operators say that given they account for more than half of data internet traffic, Alphabet’s Google, Apple, Meta, Netflix, Amazon and Microsoft should contribute to the billions of euros in infrastructure costs.
“We recognise the financial challenges that European telecom operators now face after decades of strong performance,” Kevin Salvadori, Meta’s vice president for network and Bruno Cendon Martin, its director and head of reality labs wireless, wrote in a blog post.
“However, proposals by some European telecom operators to impose network fees on Content Application Providers (CAPs) such as Meta are not the solution,” they said.
“Network fee proposals are built on a false premise because they do not recognise the value that CAPs create for the digital ecosystem, nor the investments we make in the infrastructure that underpins it.”
They cited the tens of billions of euros Meta invests in its apps and platforms such as Facebook, Instagram and Quest which in turn creates the demand that allows telecom operators to charge people for internet access.
Meta pointed to the over $880 billion in digital infrastructure around the globe, including about $120 billion a year from 2018 to 2021, which tech companies have collectively invested, saving telecom operators around $6 billion per year.
It dismissed telecoms providers’ arguments that the expansion of the metaverse, shared virtual worlds accessible via the internet, would strain infrastructure capacity.
“But this is nonsense. The development of the metaverse will not require telecom operators to grow capital expenditures for greater network investment,” Salvadori and Martin said.
