Telco Mergers Still A Long-Distance Call In Europe

www.oann.com | 2/26/2018 | Staff
oxboy (Posted by) Level 4
BRUSSELS (Reuters) – Telecoms companies and investors hoping that unconditional EU approval of Deutsche Telekom’s Dutch deal could signal a softer regulatory stance towards mergers in the sector would do well to be cautious.

Shares in the European telecoms sector index gained more than 3 percent on Monday after Reuters reported that the European Commission would clear Deutsche Telekom’s deal without demanding any concessions unlike some major cases in recent years.

Deutsche - Telekom - Shares - Percent - Monday

Deutsche Telekom’s shares gained as much as 2 percent on Monday while Tele2, which is selling its Dutch business, jumped 9 percent to a four-month high.

The telecoms industry has been urging the European Commission to consider the big picture when looking at mergers which aim to boost revenue and investment in the sector.

Approval - Deal - Sign - Features - Market

The approval of the Dutch deal is a positive sign, but it has features specific to the Dutch market that make it tricky to interpret this as a major regulatory shift by the EU.

The Commission formally approved the deal on Tuesday, in a confirmation of the Reuters story, saying the merger was unlikely to lead to significant price rises and would not increase the likelihood of mobile network operators coordinating in anti-competitive practices.

Telecoms - Industry - Bind - Europe - Chief

The telecoms industry had been in a regulatory bind since Europe’s antitrust chief Margrethe Vestager blocked a bid by Telia Company and Telenor to merge their Danish businesses in 2015 and a year later halted CK Hutchison Holdings’ deal in Britain.

The rationale was that four-to-three tie-ups would lead to higher bills for consumers, thwart the development of network infrastructure and harm innovation. To offset these, merging companies were forced to reinforce a smaller or new rival.

Operators - View - Industry - Desperate - Cash

Operators said this was a short-sighted view of an industry desperate for cash to roll out 5G and be able to compete more effectively with internet rivals.

A more flexible approach by EU...
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