According to several people familiar with the discussions, the attendees left the meeting intent on exploring the idea, given their frustrations that Europe’s disjointed market has impeded their ability to compete.
One source said the EU would not oppose such an alliance, but objections could be expected from national regulators. In December, Almunia said there could be “other ways than mergers to promote efficiency gains among operators, such as network-sharing agreements”. A private briefing document for Almunia on telecoms industry consolidation, seen by the FT, notes that the commission has never assessed a mobile telecoms merger that created a unified, cross-border network.
One idea floated since the meeting is the creation of a “newco” structure to pool companies’ network infrastructures, along with the debt associated with these assets. The new vehicle could be used on a wholesale basis by all groups, with potential financial incentives in place to compensate those that contribute their network. It would also have better access to funds, both public and private, to build out fibre networks.
Reuters reports separately that the talks with Almunia were centred more on consolidation through mergers and acquisitions, rather than creating a single network. Its sources familiar with the meeting on 28 November said any talk of establishing a single European network was still theoretical. "The talks were centred in consolidation in Europe and in sharing networks, and not in a single market or in a single telecoms network in Europe," said one source.
Executives from Deutsche Telekom, France Telecom, Telecom Italia, Telefonica, KPN and Belgacom attended the meeting with Almunia."They discussed competition in the sector in general, in particular the issue of consolidation and how the Commission examines mergers in the sector under the EU merger regulation," said Antoine Colombani, Almunia's spokesman.
