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Exclusive-EU may miss gigabit target, more investments needed, telecoms group says

EU-TELECOMS-TECH-EXCLUSIVE:Exclusive-EU may miss gigabit target, more investments needed, telecoms group says
EU-TELECOMS-TECH-EXCLUSIVE:Exclusive-EU may miss gigabit target, more investments needed, telecoms group says Copyright Thomson Reuters 2023
Copyright Thomson Reuters 2023
By Reuters
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By Foo Yun Chee

BRUSSELS - The European Union risks missing its target to connect all European households to a gigabit network by 2030, underscoring the need for more investments, according to a study commissioned by telecoms lobbying group ETNO.

The study by Analysys Mason comes as the bloc considers the possibility of getting Alphabet Inc's Google, Meta, Amazon.com Inc, Netflix , Apple and Microsoft to bear some of the network costs.

Deutsche Telekom, Orange, Telefonica, Telecom Italia and their peers say this should be seen as a fair share contribution from the six content providers which account for more than half of data internet traffic.

Big Tech sees it as an internet traffic tax at odds with EU net neutrality rules treating all users equally, saying that they also invest in their own content delivery networks.

Total telecom investment in Europe peaked at 56.3 billion euros in 2021, the highest since 2016, but still lagged behind other regions, the report said.

"Europe continues to trail its peers worldwide in terms of telecoms investment. Investment per capita adjusted to GDP was 104 euros in Europe in 2021 compared with 260 euros in Japan, 150 euros in the United States and 110 euros in China," the study said.

"More investment capacity is needed to accelerate innovation, but the established current trends place additional pressure on many operators to sell or separate service and innovation-related assets," it said.

The study also noted the large gap between the returns on investment for telecoms operators and those for Big Tech.

"There is an acute discrepancy between the returns on investment in European telecoms infrastructure and the returns on investment of the largest services that run over this infrastructure," it said.

"When it comes to internet access, it is telecoms operators that shoulder the investment burden, while in terms of new value creation it is tech companies that benefit the most."

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