Telecoms providers demand that Apple and Google invest in networks

Apple, Facebook and Google have been asked to put their hands in their pockets and contribute to network investments.

That’s the request from European Telecoms providers who claim the companies are flooding networks with no incentive to cut costs. They want them to help pay for the billions of dollars of network investments needed for their bandwidth-hogging services, such as online videos, music and games.

France Telecom SA, Telecom Italia SpA and Vodafone Group Plc have now gone on the war path and are demanding a new deal, which will require such content providers to pay fees linked to usage.

“Service providers are flooding networks with no incentive” to cut costs, France Telecom Chief Executive Officer Stephane Richard told Bloomberg last month. “It’s necessary to put in place a system of payments by service providers as a function of their use.”

It is thought that as more people access these services and the internet that building bigger networks will become a matter of importance, and at the same time cancel out  revenue growth for wireless operators, cutting their return on investment.

Whether Apple and co agree to cough up remains to be seen, but we see a battle longer than the Trojan war ahead.