EU’s Margrethe Vestager hits out against telecoms consolidation

Margrethe Vestager, European Union competition commissioner, has thrown down a marker of her intent to curtail consolidation in Europe’s telecoms industry by dismissing suggestions that a wave of big mergers is needed to boost investment. She has expressed particular concern about countries where the number of operators was dropping from four to three, and in a combative speech shot down the main argument used by the companies to justify such tie-ups.

“Incumbent operators argue that if they cannot merge with their rivals in the same country they will be unable to increase their investment. I’ve heard this claim quite often, but I have not seen evidence that this is the case,” she said in a speech in Paris. “Instead, there is ample evidence that excessive consolidation may lead not only to less competition and more expensive bills for consumers, but that it also reduces the incentives in national markets to innovate.” A harder line on telecoms mergers would represent a volte-face by Brussels. Under the previous administration, a number of deals in Germany, Austria and Ireland were approved, albeit with some concessions intended to stimulate competition.