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Telecoms: towards a new season of marriages between operators in Europe?


A hundred operators in Europe for 447 million citizens. Three in the United States for 331 million inhabitants. The same figure in China for 1.4 billion people. European telecom groups like to brandish these statistics to complain about rules that would prevent them from playing on equal terms with their American or Asian counterparts.

Operators keep reminding us that, in an industry with fixed costs, size is essential to make profitable investments in 5G and optical fiber. “Only a quarter of Europeans have access to 5G. In China, the coverage is 65%, and it is 87% in the United States”supports Franck Bouétard, CEO for France of the telecom equipment manufacturer Ericsson, to illustrate this handicap.

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These arguments are starting to make their way. “It is time for us to have a serious discussion on the possible obstacles to the cross-border consolidation of electronic communications providers in the European Union, as well as on the advantages of an integrated radio spectrum market”launched on February 27 Thierry Breton, the European commissioner for the internal market and digital technology, during the Mobile World Congress in Barcelona (Spain).

These two themes appear in the consultation opened on February 23 by Mr. Breton, in addition to that on the contribution of digital groups to the financing of networks. The idea of ​​consolidation also runs through the mind of her colleague in competition, Margrethe Vestager: “Europe needs truly pan-European players and a single telecoms market”support its services.

Does a cross-border merger really generate savings if the two operators do not have a network to pool to share the costs? A marriage between two groups from the same country, like the one attempted by Bouygues Telecom and Orange in 2016, is much more powerful. But, on this point, the European commissioner, who had opposed in 2015 the merger in Denmark between TeliaSonera and Telenor, and the following year that of the British Hutchison and O2, is still as suspicious, fearing an outbreak of package prices, even more “in the current context of rising inflation”recalls his spokesperson.

“National champion concept”

The Commission’s decision on the proposed merger between Orange Spain and MasMovil, announced in 2022 but notified in mid-February in Brussels, will serve as a test for European doctrine. The operation would automatically eliminate one of the four major players in the country. “There is no magic number of operators per country and that means we have to balance the anti-competitive effects of less competition against the potential efficiencies”explain the services of Mme Vestager. The decision is expected in the second half of 2023.

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