European carriers say Apple should pay up for network improvements

“Google Inc., Apple Inc., and Facebook Inc. need to pitch in to help pay for the billions of dollars of network investments needed for their bandwidth-hogging services, European phone operators say,” Matthew Campbell and Jonathan Browning report for Bloomberg.

“As mobile and Web companies add videos, music and games, operators including France Telecom SA, Telecom Italia SpA and Vodafone Group Plc want a new deal that would require content providers like Apple and Google to pay fees linked to usage,” Campbell and Browning report. “‘Service providers are flooding networks with no incentive’ to cut costs, France Telecom Chief Executive Officer Stephane Richard said last month. ‘It’s necessary to put in place a system of payments by service providers as a function of their use.'”

Campbell and Browning report, “To be sure, operators are benefitting from the surging popularity of mobile data use. Domestic data revenue at France Telecom, the biggest seller of Apple’s iPhones after AT&T Inc., surged 24 percent in the third quarter, rising to almost 32 percent of network revenue… Faced with slowing overall revenue growth even as data usage soars, the operators are trying to pass on some of the costs to the service providers.”

“Last month, the tensions threatened to spill into public after a plan by Apple to introduce a so-called soft SIM in its next iPhone prompted threats from European operators to cut subsidies for the device, the Daily Telegraph reported,” Campbell and Browning report. “A soft SIM would make it easier for consumers to switch network providers by eliminating the need for a new, physical SIM card issued by an operator to do so. While Apple backed off for now, the technology will eventually be introduced, Sanford Bernstein analyst Robin Bienenstock said in a note to clients, calling the iPhone-maker a ‘frenemy’ for operators.”

Full article here.

MacDailyNews Take: Apple should stipulate that their contribution only goes to improving the network performance for Apple product users. After all, this isn’t a charity operation for iPhone patent infringing wannabes, right?

Otherwise, let the market sort itself out; those who want to stream Internet radio all day while uploading photos to facebook iPhones can pay for the privilege and the rest of us can continue paying too much already for the data we consume. We have no problem with tiered pricing based on data consumption.

61 Comments

  1. Um, sorry but I don’t want to pay higher prices on Apple’s products because Apple has to pay ISPs for users that sit around all day playing Farmville on Facebook on their smartphone

    Simple- Change the user for what they use.

    There ya go. Problem solved.

  2. Apple pay for upgrading their network…..snicker…snicker…snort…HAHAHAHAHAHAHAHAHAHAHAHAHAHAHHhaaaa…whew.

    Can I have Ford pay for a more efficient engine, a larger fuel tank and a pair of fuzzy dice?

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAhAHAHAHAHAHAHHAhA!!!!!!!!!!!!!!!!!!!!

  3. Smartphone use world wide has grown tremendously, as has 3G use for laptops and so forth. Apple has certainly helped to drive this growth, but they alone are not responsible for helping the networks to catch up. Further, all the European networks were built with heavy government subsidies to begin with – and today the governments are not going to contribute.

    Basically, this is like what AT&T did with the $30 unlimited plan when it introduced the two current data plans. The difference is that the Europeans did not analyze or forecast this growth and the need to raise their rates as well as AT&T did.

  4. @The Obama Mistake

    “Europeans. Always looking for a handout.

    When did you Euros become such codependent pansies?”

    Don’t be such a small-minded moron. Your free-market loving American companies are trying to do the same thing–charge companies extra if their content takes more bandwidth than regular sites (e.g. Youtube, NetFlix, etc), or for preferential treatment.

    And yet you’ll whine and cry against net neutrality because it’s government interference (granted politicians on both sides will fsck up any and all legislation, no matter how good it starts off as).

  5. Another example of rob Peter to pay Paul. Apple et al have caused these carriers revenue to dramatically increase of the past several years (Campbell and Browning report, “To be sure, operators are benefitting from the surging popularity of mobile data use. Domestic data revenue at France Telecom, the biggest seller of Apple’s iPhones after AT&T Inc., surged 24 percent in the third quarter, rising to almost 32 percent of network revenue.). It’s like GM wanting to charge purchasers of their autos to pay for a new production facility because of high demand.

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