Why the broken telecommunications sector could be upwardly mobile

It takes a brave soul to call a recovery in European telecommunications. Yet there are a few, tentative signs that the struggling sector may be ringing in the changes. Providers of mobile telecommunications services have long been stuck in a value trap. Recently, however, there have been a few positive signals. The UK’s Competition and Markets Authority approved Vodafone’s merger with Three UK without imposing the feared “structural” remedies. That’s good news for Vodafone itself. It expects to cut £700mn between costs and investments, which will allow the combined group’s return on capital to rise from the ashes to something approaching its cost, thinks Karen Egan at Enders Analysis.  More broadly, the CMA’s decision suggests something may have shifted in the minds of competition authorities.