Key Points
- Europe’s top telecom companies are urging the EU to loosen its merger rules.
- They say the current strict rules are hindering investment and their ability to compete globally.
- The industry is particularly concerned about the difficulty of “four-to-three” mergers.
- The call comes as the EU is preparing a new “Digital Networks Act” to overhaul the sector.
Europe’s biggest telecommunications companies are calling on the EU to loosen its strict merger rules. In a joint letter to the European Commission President, the CEOs of giants such as Deutsche Telekom, Vodafone, and Nokia argued that a change is urgently needed to boost investment in the region’s digital infrastructure and help them compete with their American and Asian rivals.
The telecom industry has long complained that the EU’s antitrust regulators are too tough, especially when it comes to mergers that would reduce the number of major players in a country’s market from four to three. The regulators worry this would lead to higher prices for consumers.
But the telecom CEOs say this strict approach is holding them back. “Unless the Commission takes bold action… European industries will continue to lack the strength to invest at the same pace as their competitors,” they wrote.
The letter comes at a crucial time. The European Commission is currently working on a new “Digital Networks Act,” a major piece of legislation intended to revamp the entire sector. The telecom industry is worried that this new law will ignore their pleas for a more merger-friendly environment.
This is a classic battle between the desire for competition and the need for scale. The telecom companies say they need to get bigger to afford the massive investments required for 5G and other next-generation technologies. The regulators, on the other hand, are focused on protecting consumers from monopolies.
