Jean-Claude Juncker, a frontrunner for the presidency of the European Commission (EC), has spoken out in favour of easing consolidation rules for the digital sector.
Speaking during his campaign trail, the former Luxembourg prime minister said the EC…
Jean-Claude Juncker, a frontrunner for the presidency of the European Commission (EC), has spoken out in favour of easing consolidation rules for the digital sector.
Speaking during his campaign trail, the former Luxembourg prime minister said the EC needs to prioritise the reassessment of current rules.
Juncker argued that it makes sense to allow both domestic and cross-border takeovers in light of current efforts to abolish roaming charges across the EU’s 28 member states, the Financial Times reported.
“If we ask companies to offer their networks and services no longer only nationally, but on a continental scale, we should in my view also apply EU competition law with a continental spirit,” he was quoted as saying.
Responding to Juncker’s comments, Luigi Gambardella, chairman of European telecoms trade body ETNO, said EC presidency candidates are “rightly recognising the transformative role of our sector”.
“We share the view that the priority of the new commission should be to bring Europe back to economic growth and that the new agenda for a digital Europe should facilitate private investments and innovation.”
Adrian Baschnonga, lead analyst for global telecoms at EY in London, noted that improved consolidation opportunities could act as an “antidote” to tough conditions in the European telecoms sector.
The EC’s draft reforms to introduce a “single market” for telecoms, which includes abolishing roaming charges, recently won the approval of the European Parliament. It now needs the green light from the European Council to become law.
However, some sector players and commentators have argued that further reforms are needed.
Baschnonga lamented a lack of clarity on the rules surrounding M&A.
“The EC’s Connected Continent package focuses on contentious issues such as net neutrality, yet antitrust attitudes are now the major theme in some of Europe’s largest markets, with a number of national governments now seeing the merits of consolidation,” he said. “In this light, there is the risk of a growing gulf between national and regional attitudes towards improving market structures at a time when other regions are overtaking Europe in terms of network coverage and capability.”
Mobile operators lobbying group GSMA has also argued that the draft reforms do not go far enough, saying it “fails to address the key challenge of stimulating growth and investment”.
European telcos have long called for more relaxed antitrust rules and, in May, sent a letter to telecoms commissioner Neelie Kroes requesting simpler, more even-handed regulation that supports consolidation. The companies, which included many of the region’s largest operators, argued that the current antitrust framework is hampering their ability to invest and compete on a global scale.
