Andrus Ansip, the European Commission VP for the Digital Single Market, has suggested the EC is more in favour of cross-border than intra-country consolidation in the telecoms market. In a speech at the FT-ETNO Summit in Brussels, Ansip acknowledged that a "degree of consolidation" can bring potential benefits, and as an example, he pointed to cross-border consolidation, which can lead to integrated, pan-European networks and expansion opportunities for operators as they tap into larger populations. However, the commissioner noted that "industry consolidation is not necessarily the answer" to ensuring competition. Most mobile operators are already investing in 4G without the need to resort to mergers, and network-sharing technologies allow them to share infrastructure in order to reduce costs, without the need for full mergers, he said.
His comments come as the industry group ETNO published a new report by Boston Consulting Group that underlined the need to rethink the EU's competition rules and merger review criteria for telecoms deals. The report said the EC should lessen its focus on price in merger reviews and look more at the impact of consolidation on investment and the increasing competition from new service providers in the telecom market.
Ansip was more in agreement with ETNO's calls for regulatory reform when it comes to harmonising spectrum rules across EU countries. He did not provide any clues though on how the EC is leaning in the upcoming review of the electronic communications framework, saying only that "relaxing competition rules is not the answer" to achieving the EU's goals for broadband connectivity. "That would only shift the cost of the required network investments onto consumers," Ansip said. "They would then have less choice and higher prices."
The BCG report, as well as Ansip noted that there is still a significant shortfall in the investment required to meet the EU's targets. BCG estimates that only EUR 110 billion of the EUR 216 billion required has been planned by public and private projects. According to the European commissioner, "the public purse cannot be expected to meet this shortfall". Competition will be key to attracting the needed investment, supported by regulation that ensures fair access to network infrastructure, he said.
