The Internet Value Chain Report Launch Event – Key highlights

The GSMA 2022 Internet Value Chain Report, launched in May 2022, revealed that market imbalances between network operators and online services providers may put global growth prospects at risk across multiple sectors of the internet-based economy. The study highlighted factors including asymmetric regulation and restrictions, sector-specific taxes, and spectrum costs are squeezing the business models of infrastructure providers whilst allowing Big Tech to thrive.

Read the GSMA press release “GSMA Warns Internet Value Chain Growth to Stall Unless Market Imbalances Addressed“.

To discuss some of the issues addressed by the report, the GSMA hosted a launch event with European policymakers, industry leaders and analysts to debate the study’s implications for the internet ecosystem and related policy and regulation. Please find below key highlights from the launch event.

Introductory remarks by Daniel Pataki, Vice President, Policy and Regulation & Head of Europe, Russia and CIS, GSMA.

The Internet Value Chain report presentation and key findings by Colin Rand, Associated Partner, Kearney

Key highlights from this session:

  • The internet value chain continues to grow strongly with no indication this will slow in the foreseeable future. Revenues across the internet value chain more than doubled from $3.3 trillion to $6.7 trillion between 2015 and 2020.
  • More than 80% of total internet traffic is video and  content, while the services of only six internet companies account for more than half of all internet traffic.
  • Three key trends from the report: the largest players are expanding across the value chain; paid-for services (rather than advertising-based) now make up the majority of online services; and digitalisation of the wider economy is driving further growth.

Panel I: Reactions from the Internet ecosystem

The first panel “Reactions from the Internet ecosystem” with Ben Wreschner, Chief Economist and Head of Public Affairs, Vodafone Group, Tomas Jakimavicius, Director, European Government Affairs, Microsoft, Sandeep Chowdhury, Senior Director-Telecommunications, SAP, Jakob Bluestone, Head of Telecoms Equity Research, Credit Suisse, Axel Freyberg, Senior Partner, Kearney, moderated by Dr. Mani Manimohan, Head of Digital Infrastructure Policy & Regulation, GSMA, centered on the economic architecture and trends of the internet ecosystem.

Key highlights from the discussion:

  • There is an increasing need to expand and evolve the networks that provide internet access.
  • More investment is needed in network capacity and network capabilities to meet this demand.
  • Telcos are in a two-sided squeeze as online services replace traditional telco services (especially in the enterprise) and as telcos’ asset base is reduced in efforts to maximise efficiency
Panel II: Regulatory challenges for the Internet Value Chain

The second panel “Regulatory challenges for the Internet Value Chain” with Josianne Cutajar MEP, Annemarie Sipkes, BEREC Chair 2022, Pearse O’Donohue, Director for the Future Networks Directorate at DG CONNECT, European Commission, and Juan Montero Rodil, Chief Public Policy, Competition & Regulatory Officer at Telefónica, moderated by Laszlo Toth, Head of Public Policy, Europe, GSMA, discussed regulatory challenges for the Internet Value Chain, including Europe’s digital transformation, cloud-based infrastructure, OTT’s contribution to network costs and other topics.

Key highlights from the discussion:

  • Josianne Cutajar MEP called for a fair digital environment for all its users.
  • Key priorities for the European Commission are to stimulate digital skills and ensure affordable connectivity for all citizens. Discussions are taking place on what may be needed to achieve these goals fairly and sustainably.
  • For BEREC, key priorities are to promote connectivity, ensure sustainable open digital markets and protect end-user needs through evidence-based regulation.
  • The era of hyperconnectivity presents enormous opportunities, but the digital sector needs to realign on shared priorities and responsibilities to overcome the connectivity challenge.
Download the Report