European telecoms want to create a huge European telco player09 Jan, 2013
European telecoms like Deutsche Telekom, France Telecom and Telefonica are in discussions to create a pan-European infrastructure network to replace the fragmented national markets, the FT reports. Apparently, EU competition chief Joaquin Almunia is not prima facie against the idea:
“Mr Almunia has taken a tough stance against national mergers that reduce competition. But he has indicated more openness to cross-border tie-ups that would help build a single EU market, generate cross-border services and drive digital investment. (FT)”
The telecoms feel that the fragmented European market hinders their ability to compete with bigger US and Chinese groups, says the FT.
Recently we wrote that according to Vivendi chairman Jean-François Dubos, there are just too many telecoms in Europe, and a consolidation is inevitable. The telecoms are also hurting financially because of regulations, over the top services like WhatsApp and Skype and and new, disruptive players that use their networks.
Apparently, the telecoms are thinking of creating one big “newco” that would pool all the telco’s infrastructures (along with the debt associated with these assets). The idea is apparently that creating a big, supranational telecom would make it easier to access capital to invest in infrastructure like next-generation fibre networks.
Spotted via Pieter Dubois:
— Pieter Dubois (@PieterDuboisFI) January 8, 2013
What do you think? Terrible, monopolistic idea, or a necessary step to create that European ‘Single Digital Market’?
Photo: Frozen Chipmunk, Flickr
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