Telco CEOs in Europe have called on Big Tech companies in the US to fund the hugely expensive network upgrades that are being implemented at the moment.
5G is hugely expensive, 6G will presumably be the same and capex runs into the billions every year.
The argument is a familiar one. Big Tech makes the money out of a telco’s network and therefore they should chip in for using it. So far, 13 Telco CEOs have signed a letter to this effect.
It will not come as a great surprise when Big Tech tells the telcos where to go with the request. Digital service providers have been making money on the back of telcos for the last decade or two and are not about to change.
In fact, the letter from the Telco CEOs seems to be like an admission of defeat, rather than a request for co-operation. ‘We have no idea how to monetise our networks, so we will leave it to you but please send money.’
What we might have expected from Telco CEOs was a bit more fighting talk. 5G (and 6G) are meant to be transformative technologies, more a reinvention than an upgrade.
Yet, once again, there is no sign that telcos have any ideas about how to make real money out them. Instead, they sound very like utilities.
Europe is not alone in this. Recently South Korean ISP SK Broadband sued Netflix for clogging up its network with traffic heavy content.
The question for telcos remains the same, whether or not the telco CEOs get any results from their letter. They must find ways of monetising their networks, or they will inevitably become the dreaded bit pipes that we have long predicted.
The question then becomes: So what can a telco do to monetize its network?
The answer is not easy, of course, but we know that customers trust their network provider and with trust as an asset, there are many services that might not be as ‘cool’ as a social network or streaming business but they should be compelling.
Security is a huge focus at the moment and we get daily reports of an increase in ransomware attacks, for example. Providing a security service on the back of the apparently ‘super-secure’ network that is 5G would surely be a place to start. Securing customers’ digital worlds must be a valuable service and one that can extend across multiple ecosystems.
Telco CEOs might well want Big Tech to pay for their network upgrades but how much better would it be if they did not have to, that they knew how they were going to monetize the network themselves.