Mobile carriers eye charges for content providers

European mobile phone operators are putting increasing pressure on internet content providers to pay for the bandwidth consumed by their services.

According to a report by Bloomberg, officials from France Telecom, Telecom Italia and Vodafone have all called for content providers to pay for the privilege of having their wares delivered to mobile consumers.

We are progressively going to switch from the unlimited approach that has been the trademark of our industry to something which is more sophisticated

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

At the Paris-based “Le Web” conference, mobile industry figureheads have also continued to back charging at both ends of the carrier path, and carriers say unlimited data plans will die out as a result of a surge in data consumption.

“We are progressively going to switch from the unlimited approach that has been the trademark of our industry to something which is more sophisticated,” Richard said.

However, content providers are expected to put up a battle against paying more for data carriage, claiming they already pay data costs anyway and that the operators should be responsible for their own expenses.

“Currently, about 40% of our expenses go to networks anyway – servers, peering, our content delivery network, and other resources,” Giuseppe de Martino of online video provider Dailymotion told Bloomberg.

“If telecom operators want us to share in their expenses, perhaps we should talk about sharing subscription revenues as well.”

Critics of plans to charge for carrying content highlight the fact that although data costs the carriers, they also benefit from higher revenues as a result of increased traffic.

France Telecom, for example, saw domestic data revenue surge 24% in the third quarter, with web traffic accounting for nearly a third of network revenue.

The debate follows a similar argument unfolding in the US, where elements of the net neutrality debate have suggested landline internet access remains open and neutral, but mobile operators should be able to prioritise or throttle certain services depending on deals with media providers.