The disconnect between the often-touted promises of universal connectivity and the network funding efforts of the telecommunications companies that will make it a reality was the theme of the Mobile World Congress. The annual technology festival in Barcelona last week followed a tradition of corporate executive protests, but there were differences. The good news for them is that European competition authorities appear to have been impressed by the ongoing calls and may be leaning toward a more lenient approach to industry consolidation.

More than 80,000 visitors could wander the giant halls and ponder the wondrous vistas of talking robot dogs, foldable smartphones, or Nokia’s plan to deploy a 4G network on the moon, for example.

European telecommunications group executives have been focused on what many see as a financial shell stuck between tough regulators, demanding shareholders and the need to continue massive investment to keep up with technological developments and consumer demands.

“Good faith participation” was one of the key concepts discussed at the meeting, namely the attempt by European telecommunications groups to hold large American technology companies responsible for much of the data traffic on their networks by participating in the financing of their investment projects.

Christel Heidemann and Timotheus Hetges, the respective chief executives of the $30 billion French company Orange and the $112 billion German Deutsche Telekom, called it “unsustainable” when the five largest traffic data generator platforms, namely Alphabet, Apple, Amazon, Netflix and Meta Platforms, collectively account for 55% of data traffic. Hetges compared the 55 billion euros that European telecommunications companies invested in infrastructure last year with the 1 billion euros invested by these giant groups in communications.

However, the difficult debate is only just beginning. The conflict turns David against Goliath. The five US companies targeted by European groups to encourage them to contribute have a combined market capitalization of over 5 trillion euros. dollars.

This makes them 21 times larger by this criterion than the five largest European groups in the sector combined. Regulators oppose the idea of ​​fair burden-sharing, as do some governments, including the Dutch. There is also no consensus on what form this distribution will take.

A tax that would be neither practical nor popular, but an alternative such as wholesale trade agreements risks creating problems for the net neutrality regime.

In any case, it will be years before European providers see hypothetical payments from US tech giants make a financial contribution, as the head of the telecommunications group privately acknowledged.

It is hoped that, given the low return on investment from European telecommunications groups, European competition authorities will reconsider their tough stance on industry consolidation.

The industry’s return on invested capital over the last decade has dropped to 8% this year, according to New Street Research, last seen in 2001.