Telecom event starts asking big techs for money – 02/27/2023 – Tech

The MWC (Mobile World Congress), one of the main technology events in the world, aimed at the telecommunications sector, began with a clear message from operators to big techs: divide investments in infrastructure.

The message was already given in the opening lecture, traditionally the most important, of the event that takes place this week in Barcelona.

Representatives of the telephony sector cited the expected technological transformations for the coming years, such as the metaverse and the growth of artificial intelligence, and the expectation of an exponential growth in the demand for data traffic.

“Cloud computing has changed the bar, but it will not be enough with all the traffic that Web 3.0 must generate”, said José Maria Álvarez-Pallete, CEO of Telefonica and advisor to the GSMA, the entity that brings together the telecoms and organizes the MWC. “It’s time for collaboration between technology companies, big techs and industry,” he added.

“Collaborating means everyone sharing the commitment fairly,” he added later. “Mark those words: ‘fair share’.”

The statements come amid discussions in the European Union for large technology companies to help pay for telephony infrastructure costs, the so-called “fair sharing”.

The lecture was attended, via previously recorded video messages, by two representatives of technology companies in a conciliatory tone: Satya Nadella, CEO of Microsoft, and Thomas Kurian, chief executive of Google Cloud.

Both cited investments made in recent years in products that benefit the telecom sector.
“Operators are among our most important partners. Partnership and mutual benefit are the only way to build a successful ecosystem”, stated Kurian, citing that the sectors can work “side by side”.

For the telecom companies, it fell to Christel Heydemann, CEO of Orange, to give the most direct message. “We’ve made big investments in networks and that’s hard to monetize. People always expect to pay less and get more. At the same time, we’re under pressure from investors,” he said.

“We need to keep innovating and investing, but we need to ask the whole industry to contribute,” continued Heydemann. “Telecommunications companies are in the difficult equation between regulation and investment, under pressure to achieve the goals of the digital decade. We need a push to maintain these goals, but it needs to be something applied to the entire ecosystem, not just the telephony companies” .

The digital decade she refers to is a series of objectives, which involve connectivity, established by the European bloc last year to be achieved by 2030.

Heydemann cited what he called an “imbalance”, with the top five tech companies accounting for 55% of network traffic.

On Thursday (23), the European Commission, the bloc’s executive arm, opened a public consultation on the topic of “fair sharing”, open until May 19.

“Digital markets, and in particular connectivity markets, are also undergoing transformative technological and market developments in the form of, for example, cloud computing, operating in the metaverse, in artificial intelligence, etc. Furthermore, they are not isolated from the geopolitical situation. and challenging economy”, says the document, citing the “big” investments needed in infrastructure, such as antennas, for the next generations of telephony.

According to Reuters, European telecom companies claim that more than half of the data that travels on the network comes from six big techs: Alphabet (owner of Google), Amazon, Apple, Meta (Facebook), Microsoft and Netflix.

Tech giants, on the other hand, argue that the payment would reduce their ability to invest in new products, hurting consumers, points out the news agency.

For Heydemann, from Orange, the public consultation is a first step. “We are not asking for a change in net neutrality principles, nor for a new tax mechanism. To achieve the goals of the digital decade, we want a fair share of net distribution costs so that we can continue with private investment, without relying on public money,” he said.

For Thierry Breton, in charge of the European Union’s internal market, the challenge for future connectivity is that the current telephone network does not support the technologies that will come. “We still see delays that don’t allow connected cars, or generate a 3D tour,” he said on the main stage at MWC.

He cited the pandemic, saying the internet was on the brink of collapse. “At the time, I called the CEOs of the main streaming platforms and asked them to reduce the quality of the transmissions. I was answered and the effect [de alívio] It was immediate.”

Breton cited the public consultation as “part of the puzzle” for these future investment models.

INVESTMENTS AND HOLES IN COVERAGE

The lecture was interspersed with the participation of Mats Granryd, who highlighted investments made by the telephony sector in recent years and challenges to connect the entire planet.

“Between now and 2030, operators will spend US$1.5 trillion (R$7.8 trillion), and 92% of that will be for 5G,” he said. “We need financial models that guarantee that we will be able to make these investments.”

Among the needs, he cited the holes in access to telephony. According to GSMA figures, 3.6 billion people are disconnected and, of these, 3.2 billion are in areas where coverage is available — that is, other barriers, such as financial ones, are impacted.

Journalist traveled at the invitation of Huawei