New comments from European Commission EVP Margrethe Vestager suggest that telcos are not about to get the regulatory respite for which they have been lobbying.

Nick Wood

February 20, 2024

3 Min Read

Reuters reported last week on a Commission document that implied the EU was mulling whether to relax some of its merger rules, potentially paving the way for in-market telco consolidation.

However, according to a new Reuters report, when asked about this, Vestager said she wasn't aware of any proposed changes.

The exact quote is: "No, none that I have heard of," which is a little bit ambiguous because there might be some changes in the works that she doesn't know about. However, given her job, it would come as a bit of surprise if that were the case.

A Commission spokesperson elaborated on the matter in an email to Telecoms.com.

While "there is no magic number of operators per country," they said, "experience shows that competition and customer demand are the best stimulus for investment.

"There is currently no evidence that [in-market] consolidation in the telco sector would lead to increased investment by telecom companies in Europe, including for the roll out of 5G," they said.

While this development will probably disappoint operators, some of Vestager's other comments might pique their interest.

Instead of removing barriers to in-market consolidation, Vestager is keen to remove barriers to cross-border business, making it easier for operators to generate economies of scale, and ushering in a single telecoms market.

Whenever this is mentioned, thoughts usually tend towards cross-border M&As, and that is indeed the idea that the EC's Internal Market commissioner Thierry Breton is pushing. However, as Telecoms.com reported in October, there is little appetite for this among telcos, which cite the lack of a business case due to insufficient efficiencies.

There are other levers the EU might try and pull on though, spectrum being one of them.

According to Reuters, Vestager said one of the barriers to the single telecoms market is that spectrum is regulated by individual governments, some of which see it as more of a cash cow than a way to roll out new telecoms tech.

"The business potential is so much bigger because you know if you have a more centralised spectrum management, you can actually harvest efficiencies that are not possible today," she said.

It's hard to know exactly what Vestager means by this without a more fulsome explanation, but as a route to a single telecoms market goes, overhauling spectrum management would be one of the bumpier ones to take.

Generally speaking, spectrum is considered by governments to be an important, finite, strategic, national resource. None of those adjectives suggest that a government would give up control of it willingly. Incumbent users that aren't telcos – like broadcasters, emergency services and militaries – might not be thrilled about the idea either.

There are also myriad coordination issues with which to contend, such as licence terms expiring at different times in different markets. This would make it difficult to assign spectrum on a pan-European basis, if indeed that is what the Commission has in mind.

Multinational telco groups might be in favour of the idea of cross-border spectrum – it would probably be cheaper to bid at one auction for spectrum in multiple markets than on a per-market basis. Indeed, Vestager's comment might simply be a way to encourage them to start lobbying individual governments instead of Brussels. However, smaller, challenger brands that have no interest in pan-European operations might not be as keen on the idea.

Whatever Vestager truly meant by "centralised spectrum management," it could nevertheless be the start of an interesting conversation in the European telecoms market.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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