MVNOs fear they will be collateral damage of EU plans to make big tech pay for networks

Employees on their mobile phones
(Image credit: Photo by Ketut Subiyanto from Pexels)

European mobile virtual network operators (MVNOs) have warned they would be collateral damage of an EU proposal that would require technology firms to make financial contributions for the construction and maintenance of mobile and broadband networks.

Telcos have frequently expressed their frustration that companies such as Google, Meta, Netflix, and others have benefited from network investments, while it is operators who are forced to ensure there is enough capacity to meet demand.

5G and fibre deployments are important for many of the EU economic and societal ambitions but are capital-intensive projects that require a sufficient return on investment to be attractive at a time when traditional revenue streams are under threat.

MVNO popularity

The EU has suggested the current situation is unsustainable, raising the possibility that big tech firms could be subject to additional fees. 

However, MVNOs, which do not own and operate mobile infrastructure, say they would be affected too – distorting competition and innovation in the mobile sector.

Industry body MVNO Europe says not only would its members be subject to additional costs, the funds they would pay would be used to strengthen the position of incumbent operators, making it more difficulty to compete. This would not only have an impact on price, but would also make it unfeasible for many niche MVNOs to offer their services.

“We believe that these suggestions are based on incomplete assumptions and insufficient understanding of the technical arrangements underpinning the exchange of internet traffic,” MVNO Europe said.

“We fear that the suggested network investment contributions would seriously harm competition on telecom markets, harm MVNOs directly, and ultimately be detrimental to both consumers and business users.

“This proposal could bring to the unwished result that largest telecom providers will have their network services paid not only twice (by customers and by content and application providers), but even three times (i.e. also by alternative operators, which however are already paying network access fees).”

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.