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[Image source=Reuters Yonhap News]

[Asia Economy Reporter Oh Su-yeon] Global telecom companies are set to actively engage in discussions on sharing network investment costs with global content providers (CPs) at the Mobile World Congress (MWC) scheduled for the end of February next year. This contrasts with South Korea, where initial discussions on 'network usage fees' have recently lost momentum.

According to the telecommunications industry on the 26th, the Global System for Mobile Communications Association (GSMA) will hold the MWC in Barcelona, Spain, on February 27 next year. It is expected that discussions to have big tech companies such as Google, Meta, and Netflix contribute to network investment costs will be actively promoted in conjunction with the MWC event.

Earlier, at MWC22 held in February this year, the GSMA board agreed that big tech companies should also contribute to network infrastructure investments to share the rapidly increasing traffic handling costs. There was significant support for creating a government-led fund with contributions from global CPs. Subsequently, GSMA gathered opinions from Asia-Pacific operators on this issue at a global telecom event held in Singapore in August and held a board meeting in Mexico City in September. One of the agenda items was strengthening demands for big tech to share network investment costs. According to industry sources, KT CEO Koo Hyun-mo, a GSMA board member, attended the meeting via video conference. In October, GSMA issued a statement emphasizing the need for fair contributions from these companies, noting that six global CPs generate half of the world's traffic. In November, GSMA ICT policy executives also visited South Korea. They showed interest in current issues such as the network usage fee-related bills proposed in the National Assembly and the lawsuit between Netflix and SK Broadband, and reportedly held meetings with domestic telecom companies.

Since the global telecom industry has been steadily taking steps over the past year starting with this year's MWC to demand network usage fees, concrete discussions are expected to ignite at next year's MWC. The possibility of formalizing these demands into law is also being mentioned. Kim Hong-sik, a researcher at Hana Securities, predicted, "At the 2023 MWC, GSMA plans to discuss the formalization of network usage fees," adding, "This will be an opportunity to strengthen telecom operators' network dominance in the 5G and 6G era."

The growing voices of global telecom companies demanding big tech share the rapidly increasing network investment costs also add weight to GSMA's decisions. Earlier in September, CEOs of 16 European telecom companies issued a joint statement demanding big tech share network investment costs. Recently, the Spanish government also made similar demands to EU regulators. This is not limited to Europe. The Cellular Operators Association of India (COAI) urged OTT service providers last month to pay for the costs imposed on networks.

While global telecom companies, centered in Europe, are accelerating discussions on network usage fees, South Korea is losing momentum and drifting. Although it initially led global discussions through bill proposals and lawsuits, it has recently been quiet. Seven amendments to the Telecommunications Business Act were proposed in the National Assembly, forming bipartisan consensus, but after the first public hearing in September, Google launched a public relations campaign, and 280,000 people signed a petition opposing the bill. Coupled with conflicts between ruling and opposition parties, the momentum has been lost. The second public hearing, scheduled to be held within the year, has also been postponed.

This content was produced with the assistance of AI translation services.