Thursday, September 15, 2016

Will the EU Extend Regulations to Mobile Telecom Apps?

Telecom operators in the EU have long been complaining of an unfair playing ground in their competition with Over The Top (OTT) players: tech firms connecting people over the web like Google, Facebook, and Whatsapp. Telecom operators feel they face more restrictions and regulations than the OTT players in taxation and data usage.

Net neutrality
Telecom operators have loudly complained that OTT operators are free loaders and use costly infrastructure for free. France Orange has stated that over 50% of its broadband traffic comes from Google sites like YouTube. In their case, they made a deal with Google. This is the exception rather than the norm in the current situation.

Telecom operators say that the future of 5G connectivity, expected in Europe by 2020, is not guaranteed as they are not ready to invest in the current regulations. Huge infrastructure projects like laying fiber optic cost up to $20 billion, which they are not willing to put up with uncertainty on return on investment.

Mobile telecom operators have been up in arms over regulation on pricing for their data services arguing that they cannot effectively compete with OTT operators who have not incurred any cost, and can price their services at significantly lower prices.

Security and privacy
The EU has had stringent regulations for telecom operators when it comes to customer data. The telecoms cannot use customer data for marketing purposes. OTT operators do not have these regulations to worry them.

Facebook and Google draw huge amounts of revenue from advertising. This is by providing advertisers a platform to reach their massive audience. As part of making these platforms attractive, these OTT operators use customer data for better targeting.

Telecom operators argue these double standards are unfair and deny them considerable revenue. They also face penalties for data breaches that emanate from OTT networks which is unfair as they incur data security measures for data bringing in no revenue. Mobile apps like Whatsapp and Skype have responded that they have implemented end to end encryption, but the telecoms feel they should also bear some costs of security.

Level playing field
The EU will be making directives on regulations to address the telecoms’ complains. Largely on the ePrivacy regulations. An overhaul of the current systems may be proposed. The EU says amending the regulations will level the playing field and help implement adequate levels of consumer protection. The telecoms are hoping that these regulations will help them see better return on investment.

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