EU competition commissioner Margrethe Vestager has issued a clear warning against further consolidation in the European Union’s telecommunications sector, contradicting a recent report that recommended mergers among operators to strengthen networks.
Speaking at a Brussels conference, Vestager rejected the idea that greater market concentration at national level would produce better results for consumers or the single market.
“There is no evidence that more concentrated national markets lead to better outcomes,” Vestager said, underscoring her long-standing commitment to preserving competition.
Her remarks came shortly after a high-profile review commissioned by EU leaders advocated permitting greater consolidation among telecom operators as a way to accelerate the rollout of mobile and fixed broadband infrastructure across the 27-member bloc.
The report, authored by former Italian prime minister Enrico Letta, was welcomed by major operator Telefónica, which praised the study for identifying telecoms as a strategic sector for competitiveness, innovation, public welfare and EU resilience.
Telefónica said the Letta report “highlights the need to promote the economic sustainability of telecom operators to ensure the continuity of investment in 5G and fibre,” and noted the report’s call for “a degree of consolidation in national markets to achieve the local scale needed to attract investment and sustain sector dynamism.”
Vestager, whose record as European Competition Commissioner includes firm opposition to anti-competitive mergers, pushed back against those recommendations.
“On the contrary, it would create less competitive national markets and a more fragmented single market,” she warned, arguing that consolidation without clear consumer benefits risks damaging competition across Europe.
Telecom operators have grown frustrated by EU resistance to in-country mergers that would reduce the number of major players and potentially leave only three incumbents in some markets—a level of concentration regulators say could drive up prices and reduce service quality. Vestager’s comments, however, signal she is unlikely to ease merger scrutiny, setting up a potential policy disagreement with incoming EU leadership over the future of consolidation in the connectivity sector.
Although the Letta report and statements from some European leaders raised hopes among telecoms firms for a more lenient approach to mergers after the mid-2024 change in EU leadership, Vestager’s firm stance highlights significant institutional reluctance to permit consolidation unless it demonstrably benefits consumers and the single market as a whole.
Telefónica has also pointed to the forthcoming Digital Networks Act as a key opportunity to correct perceived regulatory imbalances between incumbent telecom operators and large technology platforms, which the company says have discouraged investment in advanced network infrastructure.
(Image Credit: Radikale Venstre under CC BY-NC 2.0 DEED license)
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