European carriers want Apple, others to finance network buildup
European carriers want providers like Apple, Facebook and Google to help finance the billions of dollars worth of network investments that their data-hungry devices and services demand. France Telecom SA, Telecom Italia SpA and Vodafone Group Plc are among those requesting that Apple and the others start paying a usage-based fee.
The carriers note that the ever-increasing pool of mobile users requires significant upgrades to their networks. Eventually, they fear, the cost of keeping up will outpace revenue growth. According to one economic researcher who's following the story, the number of mobile data connections in western Europe is expected to rise to 270 million by 2014 (that's an average of 15 percent per year), and carrier investment is expected to grow by 28 percent to US$3.7 billion.
On the other hand, providers like Apple note that they don't share in the carriers' profits, and don't see why they should be responsible for their network upkeep as a result.
It's a brave -- and pricey -- new world.
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European carriers want providers like Apple, Facebook and Google to help finance the billions of dollars worth of network investments that...
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Maybe they should start selling dumbed-down smartphones with the option to not have a data plan? Some people are happy just using the phone as a phone, SMS, and everything else over Wi-Fi.
December 08 2010 at 8:51 PM Report abuse Permalink rate up rate down ReplyWhat a load of BS.
Maybe google and apple should make there own networks and screw the others, lets see how they would like that instead.
Grow and up and deal with it.
I was in Italy for a few weeks this summer and brought my unlocked iPhone 3G. I went to the Tre store in the Milan airport and paid the minimum 8 Euro for a SIM card with a phone number (it's a prepay and the 8 Euro goes to credits). 5 Euro from the credits bought me a month of data with a 3GB cap, Skype and the extra 3 Euros took care of my voice needs and the data plan INCLUDED TETHERING for my netbook! If I lived there I could pay 30 Euro a month for some ludicrous plan that had minutes in the thousands, 6000 texts and 30GB data with tethering. Other companies and countries are a bit more expensive but nobody came close to US prices.
You can't even get that from ATT, but look at what a 2GB data plan with tethering costs on subscription, and how many customers are lining up to pay that, and you can see how AT&T makes money and European companies are begging for money for network upgrades.
If anything, I believe networks in Europe are in for a reality check. Neelie Kroes, vice president of the European Commission, responsible for the Digital Agenda for Europe tweeted today:
"How can a 5c data download turn into â¬2.60 when we cross an invisible border?"
http://twitter.com/NeelieKroesEU/status/12587632185839616
Prices are going to go down, not up.
These carriers think they are so smart. They look at the harsh competition between themselves, and they are afraid to raise rates. Then they look at the growing competition between Apple, RIM, the myriad Android makers, and now MSFT, and they think, "hell, why face our demanding customers...let's turn these guys against each other. If we get just one of them to give in, we'll get them all." What they really want, is to lower those subsidies they pay for each new contract - which would raise the prices that consumers pay for phones. So my advice to the phone manufacturers...have some 'nads, and tell the carriers to pound sand. Threaten them right back with exclusivity. If their revenue isn't sufficient to pay for network upgrades, they need to try their luck at raising rates. It either works, or they die.
December 08 2010 at 1:52 PM Report abuse Permalink rate up rate down ReplyOh, and guess which operators are not going to be in question next time I look for a carrier? Right... France Telecom (aka Orange), Vodafone and Telecom Italia (in the unlikely case of me moving to Italy, thank god they haven't gotten anywhere else)
December 08 2010 at 1:48 PM Report abuse Permalink rate up rate down ReplyWell, there goes the next wave of all this net neutrality rubbish we've seen starting in the US. Network operators are just trying to milk more of the involved parties.
Instead of pricing their plans adequately they want to artificially lower their plans, asking the content providers and handset makers to pay parts of it.
Of course the only point is cheating in the price competition and making the user pay from their back pocket.
The whole thing is obviously an anticompetitive plot and we can only hope the providers will resist and the antitrust authorities will crack down on it.
Otherwise we'll soon end up having car manufacturers paying for highway construction (of course in addition to what we pay already, no instead of) and similar nonsense.
Next Comcast will be asking Netflix to pay them because Netflix customers are using more bandwidth to watch streaming movies.
Wouldn't it make more sense for these companies (network providers) to charge the people (end users) that are actually using the bandwidth and not the other companies that provide devices/services that require the bandwidth?
Oh that's right. These companies are greedy and want to be paid by both sides.
Seems ridiculous; if the data rates that companies are currently charging don't cover capital costs (or rather, the payback on the loan for capital costs) then they have something wrong with their cost structures.
Unfortunately I'm saying if you can't afford it, raise rates.
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