As Europe struggles with debt and slow growth, so do the European telecoms giants. Europe’s telecom execs are calling for more telco consolidation deals as capital is drying up and increased competition is squeezing their margins. In this economic climate the option to go it alone will not be viable for many. Telcos will start falling behind on their plans to build in the uplift required to offer next generation networks. Others operating in economies like Greece or Portugal will realise that joining up forces may be the only option to continue to operate in these markets. It will become clearer to telco execs that sharing infrastructure, merging and other similar initiatives will be the way forward if they want to operate, grow and succeed in the current climate.

We have recently seen:

• Orange France adding Ortel Mobile to its Mobile Virtual Network Operators group. Ortel will use Orange’s networks for new customers
• SFR, France’s second-largest mobile operator has announced it will be sharing its upgraded rural network with its rivals
• Turkcell signed a five year agreement with Deustche Telekom to use its network to introduce mobile services in Germany
• Greece’s Vodafone and Wind Hellas are in talks regarding a potential merger

We will no doubt be seeing more and more such deals and initiatives in the years to come. The next questions to ask are: How will the regulators deal with this and what reforms will they have to put in place to ensure the markets remain competitive?

This entry was posted on Thursday, 24 November 2011 at 4:03 pm; on the subject of Market commentary.