The great European telecoms M&A scramble is losing momentum

Wed Feb 24, 2016 12:50pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Mathieu Rosemain

BARCELONA (Reuters) - The merger and acquisition activity that has characterized the European telecoms market in recent years could soon grind to a halt, even as Orange (ORAN.PA: Quote) looks to seal a potential 10 billion euro ($11 billion) deal for French rival Bouygues (BOUY.PA: Quote).

While Orange Chief Executive Stephane Richard believes that the so-called convergence of fixed networks and mobile services remains key to growth, sector analysts have noted regulators' growing concern about reduced competition while the differences between individual markets mean that cross-border integration could prove unworkable.

"The players that are mobile only or fixed only will have difficulties if they want to remain competitive in Europe," Orange CEO Richard said at the annual Mobile World Congress in Barcelona. "We're having this kind of discussion about consolidation in Europe because we're having a convergence issue."

That desire to broaden the appeal to customers wanting a single operator for multiple services was highlighted by the announcement last week of a tie-up between mobile telecoms network operator Vodafone (VOD.L: Quote) and cable company Liberty Global LBTYA.O. The two companies are looking to combine their Dutch operations to create a stronger package of TV, broadband Internet and mobile.

Similarly, Britain's BT Group (BT.L: Quote) bought EE from Orange and Deutsche Telekom (DTEGn.DE: Quote) for 12.5 billion pounds ($17.4 billion) to create a single integrated network offering a combination of telecoms and TV services.

TWITCHY WATCHDOGS

However, competition authorities are becoming increasingly twitchy about the shrinking number of operators in some countries.   Continued...

 
The logo of French telecom operator Orange is seen on the company's headquarters in Paris, France, February 22, 2016. REUTERS/Jacky Naegelen