Google and Facebook Stealing Telco Revenue – GSMA

• GSMA says that internet service providers such as Google and Facebook generate higher revenue for telecommunication operators.

• The body has warned of potential global risk across multiple sectors of the internet-based economy if it is not adequately addressed.

• GSMA advised Policymakers and business leaders to appreciate the critical role of the internet infrastructures.

According to the Global body of Mobile network operators Association (GSMA), the online services providers are generating a higher revenue than telecommunication operators.

According to the body, Netflix, Google and Facebook (Meta) e.t.c are generating higher revenue from the internet at the detriment of the telecommunication operators, who are the prominent investors in the infrastructures that provide users with internet access.

In 2022, the GSMA reported in its internet value chain that a lack of balance has been created between online services providers and network operators. He further warned that the hope of worldwide growth across multiple sectors of the internet-based economy might be at risk if proper attention is not given to it and the necessary actions are not taken.

The telecommunication body also reported that current studies show that despite the strong growth of the internet value chain, the returns and benefits are majorly flowing to workers in the online service field.

The report stated that while telecommunications seek to run and build connective infrastructures that corroborate, these services are not enormously benefiting as they ought to do.

The GSMA has responded to the report through their chairman José María Álvarez-Palette. He said:

 “The internet connects 4.6 billion people and drives the global economy. It is transforming business models, unlocking new opportunities, and uplifting communities worldwide. 

“But as some sectors in the internet value chain thrive, the demands of investing in the infrastructure those sectors rely on for growth are squeezing network operators. 

We welcome the growing recognition of this issue by policymakers, and as the internet-based economy expands across all sectors over the next decade,” 

The GSMA also released a report encouraging policymakers and business leaders to appreciate the significant roles of the internet infrastructures and shun all regulatory requirements, market distortion, or any factors that will limit people’s capacity to make profitable returns in all areas.

Read also: Apple and Samsung Cut Phone Production in 2022

In the report, the body stated:

“This would sustain long-term investment and not just those businesses with the biggest platforms and scale. The telecom operators have an important role to play and need the right incentives to keep investing in networks, both in core network capacity and increase in edge functionality.”

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