Europe Telco’s urge more MEGA-BARGERS to make us in, China at 5G

BARCELONA – Europe’s telecommunication companies call on more consolidation of the industry to help the region compete more effectively with super powers such as the US and China on important technologies such as 5G and artificial intelligence.

Last week at the Handelsbeurs of Mobile World Congress (MWC) in Barcelona, ​​CEOs from different telecom companies called on supervisors to make it easier for them to combine their activities with other companies and the total number of carriers that are active on the continent.

Currently there are numerous telco players who are active in several EU countries and non-EU members such as the UK, but Telco Chiefs told CNBC that this situation is untenable, because they cannot effectively compete when it comes to price and network quality.

“If we are going to invest in technology, to deep know-how, and bring drastic change, positive drastic change in Europe as other large technological companies have made in the US or we see today in China-We need a scale,” Marc Murtra, CEO of the Spanish telecomgigant TelephonicaKaren Tso told CNBC in an interview.

“To get a scale, we must consolidate a fragmented market such as the telecom market in Europe,” Murtra added. “And for that we need a regulation that enables us to consolidate. So what we ask is: unleashes us. Let’s get a scale. Let’s invest in technology and bring productive change.”

Christel Heydemann, CEO of the French courier Orangesaid that although some mega-deal activities start to collect in Europe, more needs to be done to guarantee the competitiveness of the continent on the world stage.

Last year Orange closed a deal to merge its Spanish activities with local mobile network provider Masmovil. In the meantime, British competition and Markets Authority recently approved a merger of £ 15 billion ($ 19 billion) between telecom companies Vodafone and three in the UK, subject to certain conditions.

“We have actively stimulated consolidation in Europe,” Heydemann van Orange told CNBC. “We see things changing now. There is 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 have not changed yet.”

During a fiery keynote address on Monday, the CEO of German Telco Deutsche TelekomTim Höttges, said that other telco markets such as the US and India are in size to only a handful of players.

The American Telco industry is dominated by the three largest mobile network operators, Verizon” AT&T And T-Mobile. T-Mobile is the majority owned by Deutsche Telekom.

“We need a reform of the competition policy,” said Höttges on stage at MWC. “We must be allowed to consolidate our activities.”

“There is no reason that every market has to work with three or four operators,” he added. “We have to build a European internal market … because, if we cannot increase our consumer prices, if we cannot charge the exaggerated players, we must get efficiency from the scale we have created.”

“Over-the-top” refers to media platforms such as Netflix Delivering content via the internet, bypassing traditional cable networks.

From AI to progress to 5G networks of the next generation, Europe’s telecom companies have invested heavily in new technologies in an attempt to go beyond the Legacy model to impose cables that make internet connectivity possible-a business model that has delivered the pejorative term “stupid pipes”.

However, this expensive company of modernization has happened with slow revenue growth and an inability for the sector to effectively earn its networks to the same extent that technological giants have done with the rise of mobile applications and, more recent, generative AI tools.

At MWC, many mobile network operators have spoken their use of AI to improve network quality, to better serve their customers and get the market share of competitors.

Nevertheless, the Telco bosses of Europe say that they could accelerate their digital transformation trips if they are allowed to combine with other large multinational players.

“There is now a real focus on European competitiveness,” Luke Kehoe, industrial analyst for Europe, told network information also, to CNBC on the MWC sidelines last week. “There is a goal to mobilize policy to improve telecom networks.”

In January, the European Commission, the executive authority of the European Union, issued its so-called “competitiveness Kompas” to EU legislers.

Among other things, the document calls for “revised guidelines for assessing mergers, so that innovation, resilience and the investment intensity of competition in certain strategic sectors are sufficiently given weight in the light of the acute needs of the European economy.”

In the meantime, last year, the former president of the European Central Bank Mario Draghi published a long -awaited report that encouraged radical reforms to the EU through a new industrial strategy to guarantee its competitiveness.

It also calls for a new digital network law that would like to improve the stimuli for telco’s to build mobile networks of the next generation, reduce compliance costs, to improve the connectivity for end users and to harmonize EU policy in the network spectrum or the range of radio frequencies used for wireless communication.

“The common theme and mood music certainly reduces the ex-anti-regulation and to promote what they would call a more competitive environment that is an environment that is more conducive to consolidation,” Kehoe Van also told CNBC. “In the future I think there will be more consolidation.”

However, the Telco industry has a way to see transformational cross-border mergers and takeovers, Kehoe added.

For many analysts from the Telco industry, the requirements for increased consolidation are nothing new.

“European Telco CEOs have never been shy to ask for consolidation and growth -friendly regulations,” Nik Willetts, CEO of the Telco Industry Association TM Forum, told CNBC. “But regulations is only one piece of the puzzle.”

“In the past 12 months we have seen a new energy from our members in Europe to continue with the enormous task of transforming themselves: simplifying, modernizing and automating their activities and old technology.”

“This will make it possible to quickly adapt to new customer needs and market reality, whether it is about building new partnerships, undergoing mergers and acquisitions or postponing integrated companies – all trends we expect to reach new heights in the coming 24 months,” he added.