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European Telcos Mull Super-Merger of Network Assets
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A number of European top mobile network operators are reported to be in talks about merging their respective network infrastructures into a smaller number of large pan-Europe companies.
Citing sources familiar with the talks, the Financial Times said that the idea emerged from a meeting between a number of the largest networks and the EU's competition chief Joaquín Almunia. The mobile networks at the talks included Deutsche Telekom, France Telecom, Telecom Italia and Telefónica.
Such a proposal would lead to considerable economies of scale for the companies putting them on a footing closer to the size of networks in the USA and China, but would also be dependent on the various national telecoms regulators also ceding regulatory control to the European Commission to act across the combined markets.
"The operators expressed a deep sense of frustration and agreed to bring constructive ideas of how a European market could work," one person familiar with the meeting told the Financial Times. "Objections won't come from Europe, they will be from the [EU's 27 national] regulators."
The EU's competition chief Joaquín Almunia has been wary of further consolidation within individual European states, but is understood to be looking upon the idea of pan-EU mergers favourably. He has expressed opinions in the past supporting more network infrastructure sharing, which is often just a few steps away from full mergers of the underlying hardware.
All that would be required is the ability to separate the underlying network from the marketing and billing customer facing part of the company, and this has been achieved with former state-owned landline operators in the past.
On the web: Financial Times
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