Europe needs telecom M&A to compete globally, say Telenor and Vodafone

Sigve Brekke, Chairman and CEO of Telenor, delivers a speech during the Mobile World Congress in Barcelona, ​​Spain, February 23, 2016. REUTERS/Albert Gea

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  • Pandemic showing how essential investing in networks is -Vodafone
  • Industry seeks to deploy 5G network
  • Fewer players in the United States than in Europe

OSLO/LONDON, Feb 2 (Reuters) – Britain’s Vodafone (VOD.L) and Norway’s Telenor (TEL.OL) on Wednesday urged policymakers to allow European mobile operators to merge and spend more on networks to keep up the pace of their peers in the United States. and Asia.

European telecom companies face a bill of up to 300 billion euros ($340 billion) to roll out super-fast 5G across the continent, a task made more difficult by regulators requiring multiple carriers to compete on each market to keep consumer bills low.

Vodafone CEO Nick Read said COVID-19 and the need for reliable and fast networks had sharpened the minds of regulators, who had realized the value of investing during the pandemic.

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“COVID has really opened the eyes of policy makers to say ‘Did we get it right? ‘” Read told reporters after Vodafone’s quarterly results were released. Read more

“And I argue that there has to be a new balance (…) Of course, we want competition. But at the same time, we have to encourage investment in next-generation infrastructure to remain competitive at scale. world.”

While there are three main telecom players in the United States – AT&T (TN), Verizon (VZ.N) and T-Mobile (TMUS.O) – there are around a hundred in Europe.

Telenor CEO Sigve Brekke agreed.

“The European Commission needs to take a different view here that allows for consolidation in the European context, otherwise we will become increasingly marginalized compared to other parts of the world,” he told Reuters afterward. that Telenor published a lower than expected fourth quarter. earnings. Read more

Telenor has 172 million subscribers in Asia and the Nordic countries. From his business perspective, consolidation was especially needed in the fragmented markets of Denmark and Sweden, Brekke said.

“Especially in Denmark, the state of competition is unsustainable and needs to be consolidated. We tried it before, but we weren’t allowed to,” he said.

Vodafone was pursuing mergers with competitors in several European markets, Read said, citing Spain, Italy, Portugal and Britain.

“We are active on multiple fronts and we are seeing good engagement from our counterparties, which confirms that we have a range of potential opportunities to shape the business with stronger assets in healthier markets,” he said. he declared.

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Written by Gwladys Fouche in Paris Editing by Mark Potter

Our standards: The Thomson Reuters Trust Principles.

Mary I. Bruner