Operators have been arguing that in-market consolidation is needed for greater investments in networks, but in a speech to the FT ETNO summit, EC vice-president Andrus Ansip said that was “not necessarily the answer”.
The European Commission’s (EC) tougher stance on mergers and acquisitions in telecoms was reinforced at a conference in Brussels today.
Operators have been arguing that in-market consolidation is needed for greater investments in networks, but in a speech to the FT ETNO summit, EC vice-president Andrus Ansip said that was “not necessarily the answer”.
Ansip, who is in charge of the EC’s digital single market programme, instead said that “modern network-sharing technologies allow operators to share mobile networks, without the need for consolidation”.
However, he came out in favour of cross-border consolidation, adopting a similar stance to former commissioner for the digital agenda Neelie Kroes. Operators argue that in-market consolidation needs to happen, and that this will be followed by cross-border tie-ups.
Ansip aligned DG Connect with DG Competition, the antitrust agency that in September effectively blocked TeliaSonera and Telenor merging their Danish operations to reduce that country’s mobile market to three players.
Competition Commissioner Margrethe Vestager recently expressed her preference for structural remedies when addressing competition concerns brought about by telecoms M&A. This represents a retreat from the more liberal approach taken by her predecessor Joaquín Almunia, whose remedy requirements had focused on concessions for MVNOs.
Kroes’ successor Günther Oettinger also spoke at the event, but did not comment directly on consolidation. However, Oettinger emphasised a need to reward investment, advocating a “market-based, investment-friendly environment”. This appears to contrast with Vestager’s position that competition drives investment.
Investors concerned
The EC is in the early stages of reviewing CK Hutchison’s plan to consolidate the UK mobile market by acquiring O2 from Telefónica and integrating it with subsidiary Three. The Hong Kong group is also waiting for a planned JV in Italy with VimpelCom to be approved.
Investors in Brussels were concerned about Ansip’s comments and the EC’s direction of travel.
“Commissioner Ansip’s comments make me extremely nervous about my meetings with clients in the coming weeks,” said one analyst at an asset manager, hinting that he might adjust his recommendations on how to allocate investments.
Another investment manager said they felt “very nervous about some of the things I’ve heard today”, adding that they were “flabbergasted” by the EC’s decision on the Danish deal.
“Europe is in last place for global certainty,” the person said.
