Deutsche Telekom Pavilion at the Mobile World Congress in Barcelona, Spain.
Angel Garcia | Bloomberg | Getty Images
Barcelona – European telecommunications companies increase calls for more industry consolidation to make the region more effectively compete with superpower like USA chines on key technologies such as 5G and artificial intelligence.
Last week at the Mobile World Congress (MWC) in Barcelona, executive directors of several telecommunications companies invited regulators to make it easier for them to combine business with other companies and reduce the total number of carriers operating on the entire continent.
Currently, there are numerous Telco players operating in several EU countries and members who are not EU members, such as the UK, the mayors of Telco told CNBC that this situation is unsustainable, because they cannot effectively compete when it comes to price and network quality.
“If we are going to invest in technology, to deep knowledge and bring drastic changes, positive drastic changes in Europe-as other major technological companies in the United States have done, or today we see us in Kini-we need,” Marc Murtra, Executive Director of the Spanish Telecommunication Gigant Telefonicasaid CNBC Karen Tso in an interview.
“To be able to get proportions, we need to consolidate a fragmented market like a telecommunications market in Europe,” Murtra added. “And for that we need a regulation that allows us to consolidate. So what we ask is: please free us. Let’s get a scale. Let’s invest in technology and bring productive changes.”
Christel Heydemann, Executive Director of a French Carrier OrangeHe said that, although some mega-deal activities begin to take a step in Europe, it should be done more to guarantee the competitiveness of the continent on the world stage.
Last year, Orange concluded a contract to connect his Spanish operations with a local Masmovil Mobile Network provider. Meanwhile, more recently, British competition and market authorsTy approved a merger of £ 15 billion ($ 19 billion) between telecommunications companies Vodafone and three in the UK, in accordance with certain conditions.
“We actively managed consolidation in Europe,” Orange’s Heydemann told CNBC. “We see things change now. There’s still a lot of hope.”
However, she added, “I think there is a lot of pressure in Europe from the business environment on our political leaders to change things. But really, things haven’t changed yet.”
During the fiery main address on Monday, the German Telca CEO Deutsche TelekomTim Höttges, he said that the second telko markets like the USA of India had only summarized a few players.
The US Telco industry is dominated by its three largest mobile network operators, Verizon,, AT&T and T-mobile. The T-Mobile is mainly owned by Deutsche Telekom.
A chart that compares the performance of T-Mobile shares, the largest American telca per market, with the German Deutsche Telekom and France’s Orange.
“We need a competition for competition policy,” Höttges said on stage on MWC. “We must let us consolidate our activities.”
“There is no reason for each market to work with three or four operators,” he added. “We should build a European individual market … because if we cannot increase our consumer prices, if we cannot charge superior players, we must draw efficiency from the scale we created.”
“Over-the-top” refers to media platforms like Netflix This provides content online, bypassing traditional cable networks.
European competitiveness in focus
From the AI to Napredak to the 5G network of the next generation, the European telecommunications companies have invested in new technologies in an attempt to cross out of the inherited models of cable installation that enables an internet connection-a business model that has earned them a pejorative term “Nonsense”.
However, this expensive effort of modernization occurred in the tandem with the side growth of income and the inability to effectively capture its networks to the same extent as technological giants did with the appearance of mobile applications and, more recently, the generative Ala of tools.
In MWC, many mobile network operators discussed the use of AI to improve the quality of the network, better serve their customers and acquire a market share of competitors.
Still, European Telco bosses say they could accelerate their journey of digital transformations if they were allowed to combine with other major multinational players.
“There is now a real focus on European competitiveness,” said Luke Kehoe, an industrial analyst for Europe in the network intelligence company Okla, he told the CNBC aside MWC last week. “There is a goal of mobilizing policy to improve telecommunications networks.”
In January, the European Commission, the executive body of the European Union, issued a so-called “Competitiveness Company” to EU laws.
The document requires, among other things, “revised guidelines for the assessment of the merger so that innovation, resistance and intensity of competition investment in certain strategic sectors gain appropriate weight in the light of acute needs of the European economy.”
In the meantime, last year former European Central Bank President Mario Draghi published a a A long -awaited report that called for radical reforms of the EU through a new industrial strategy to ensure its competitiveness.
It also requires a new Digital Network Law that would seek to improve incentives for Telcos to build the next generation mobile networks, reduction of compliance costs, improve the connection between end users, and coordinate EU policy in the network spectrum or radio frequency range used for wireless communication.
“The usual theme and mood music certainly reduce ex-ante regulation and encourage what they would call a more competitive environment, which is an environment of a more convenient consolidation,” Okla’s Kehoe told CNBC. “Moving forward, I think there will be more consolidations.”
However, the Telco industry has some way to watch transformation cross -border mergers and acquisitions, Kehoe added.
For many Telco industry analysts, the requirements for increased consolidation are nothing new.
“The European Telce Directors have never been shy to call for consolidation and regulation adapted growth,” NIK Willetts, Executive Director of the TM Forum of the Telco Industry Association, told CNBC. “But regulation is just one part of the puzzle.”
“In the last 12 months, we have seen a new energy of our members in Europe to manage with a huge task of transforming: simplifying, modernizing and automation of their operations and inherited technologies.”
“This will allow you to quickly adapt to new customers’ needs and market realities, whether to build new partnerships, undergo integrated M&A or delays – all the trends we expect to reach new heights in the next 24 months,” he added.
