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EU competition commissioner questions telecom consolidation
2015-06-15 15:10:00| Telecompaper Headlines
(Telecompaper) Margrethe Vestager, the EU commissioner for competition, has questioned telecom operators' main argument for the recent swathe of mergers and acquisitions, saying the reduction in the number of operators is more likely to lead to higher prices than increased investment. In a speech at the Concurrences conference in Paris, Vestager used the telecoms industry as an example of the increased focus on innovation and investment in the new European Commission's competition policy. While incumbent operators argue that the in-country mergers are needed in order to increase investment, the EU commissioner said she had "not seen evidence that this is the case". She said there was more 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". She used Free Mobile, the newest and fourth mobile operator in France that sparked a price war, as an example of how increased competition lead to a higher level of investment in the French mobile market. Vestager also noted the incumbents' history of abusing their dominant position and restricting access to alternative operators that form an important source of new investment. Vesatger's speech suggests the EC will take a harsh view of a number of pending mergers in Europe, such as Hutchison Whampoa's bid for O2 UK and Wind in Italy. Both deals would reduce the countries to three mobile operators from four.
Tags: questions
competition
telecom
consolidation
Category:Telecommunications
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