Business Health Miscellaneous Mobile Phones Networks News

Telecoms providers potentially merging in Europe

Joaquin Almunia, EU Competition ChiefThis is the news that has filtered out of a meeting between some of the bosses of Europe’s largest Mobile phone networks and Joaquin Almunia, the European Union’s competition chief. The bosses in the meeting included those from Deutsche Telekom (Germany), Telefonica (Spain), France Telecom and Telecom Italia, which suggest just how large such an allegiance could result in.

The idea itself aims to pool together the infrastructure owned some of Europe’s largest network providers, which is currently spread between dozens of independent providers in the 50 European countries. The result would then be similar to the North American and Chinese markets, where operators offer services through a handful of infrastructure.

Such a radical change in the way Europe currently independently operates would of course take a long time to make a reality, but the result would see single prices being offered across Europe for phone and Internet services. This could potentially mean lower prices for consumers and more focus on customer-centric businesses, where quality of customer support would become a major differentiating factor.

In its current state, the European networks are seeing a decline in revenues, coupled with the large debts that the infrastructures hold. Therefore, with the idea of a cross-border network being on the cards, new investment would be welcomed, along with a diversified risk of the debt becoming unsustainable. However, someone close to the meetings mentioned to the FT that “Objections won’t come from Europe, they will be from the [EU’s 27 national] regulators.”. This puts the idea at risk from conception, however, if the gains are both apparent for both consumers and businesses, the idea will surely become to fruition at some point.