European Telcos Brace for Digital Networks Act, Wary of Mandatory Fee

BRUSSELS, Sept. 16, 2025 — The cellular penetration, in terms of data services, has been catching up fast in European countries to meet the 5G connectivity deadline by the end of this year.

The European Commission is expected to issue a legislative proposal called the Digital Networks Act 2025 in December, which will take a more comprehensive approach to boost digital infrastructure across Europe.

A recent report by Vodafone, “A Bridge Across Communities,” highlights Europe’s deep-rooted digital divide. From the urban-rural digital divide to limited digital literacy, unequal access to devices and digital public services has proved to be a major socio-economic concern.

There is huge scope to achieve digital inclusivity in Europe by giving millions of people the privilege of connectivity that has become fundamental to daily life, as electricity or heating.

As per the report, 44 per cent of EU citizens lack basic digital skills, and one in five rural households still had no 5G coverage last year.

The report further reveals that failing to tackle digital transformation could cost the EU €1.3 trillion in lost GDP by 2033. An important influencing factor of that loss would be the digital divide, leading to digitally excluded communities experiencing poorer health, worse educational outcomes, and weaker trust in institutions.

However, telecom companies in smaller but fast-developing markets such as Slovakia are making concerted efforts to narrow the digital transformation gap in European countries. Telecom player Orange Slovakia has launched its 5G services in 26 additional villages, raising the coverage of its 5G network in the country. Besides, Slovakian operators have earmarked €500 million for spectrum top-up. The nation’s multi-frequency auction raised a total of €506 million, which even the regulator stated was high by European standards.

Know More about Digital Networks Act

5G Rollout and Efforts: The Digital Networks Act is expected to become effective from December 16 and give a complete facelift to the present set of rules, making it easier for operators to roll out 5G and fiber, and boost investment in Europe’s digital infrastructure.

However, the Digital Networks Act has not gone down well with every stakeholder, as it is likely to draw the ire of players from governments to tech firms.

There has been a constant argument from the EU’s major telecom companies that stringent rules and a fragmented single market make it tough for them to scale and earn sustainable profits, which also hampers the growth and development of European networks.

Opposition to Mandatory Fee: A group of 84 associations, including the European Broadcasting Union (EBU), Euroconsumers, and European Digital Rights (EDRi), has rejected the proposed levy of a mandatory fee to help infrastructure build-out in upcoming telecom proposals.

Telcos say they are concerned over a “fair share” mechanism, which involves content providers paying telecom operators fees for delivering traffic. They said it is “still being actively considered” in the ongoing discussions, as it endangers the principle of net neutrality.

“Measures introducing interconnection charges would risk driving up costs, limiting choice and open access to information, undermining the affordability, quality, and diversity of digital products and services,” the letter says.

Is the Network Fee on Big Tech Companies a Fair Deal?

In August this year, the European Commission expressed its resentment at the idea that imposing a network fee on Big Tech companies is a viable solution to ascertain who should fund the rollout of 5G and broadband, a spokesman for the EU executive said.

The issue pits Deutsche Telekom, Orange, Telefonica, and Telecom Italia against Alphabet's Google, Meta's Facebook, Netflix, Microsoft, and Amazon.

A major demand of Europe's top telecom operators for years to EU regulators has been to get Big Tech to bear some of the rollout costs because they make up a huge part of internet traffic, calling it fair share funding.

Big Tech has backtracked, calling it an internet tax while pointing to their own efforts to increase the efficiency of their services.

Reuters reported that the question of who shells out the tax has intensified after a White House fact sheet released on July 28 following a trade deal with the European Union, which said that the bloc confirmed that it would not adopt or maintain network usage fees.

Asserting that the EU has the sovereign rights to legislate on its digital infrastructure, Commission spokesman Thomas Regnier said a White Paper or guidance paper issued last year had already decided on the issue of network fees, reported Reuters.

“We published a White Paper last year in February. Based on the findings of this White Paper, we have assessed and we believe that imposing a network fee is not a viable solution,” Regnier told a daily press conference when asked about the White House fact sheet.

“What is important to clarify now is that such an exemption would not apply to U.S. companies only,” he said.

Despite record investments in 5G and digital infrastructure, Europe’s telecom sector struggles with regulatory hurdles and questions over who should fund the rollout.

Inputs from Saqib Malik

Editing by David Ryder