But for years, the telecommunications landscape has remained largely unchanged, with three or four operators still fighting winnowing, zero-sum battles to steal customers from one another in saturated national markets.
This month, the European competition commissioner, Joaquín Almunia, is expected to approve a combination of two mobile carriers in Austria, 3Austria and Orange Austria, reducing the number of network operators in that country to three. But it could also set a precedent that makes other telecommunications takeovers easier, said Beranger Guille, an editor in London at Mergermarket, an information service covering mergers and acquisitions.
Mr. Almunia exacted some concessions, but they were not as large as those demanded by national regulators in recent merger talks that ultimately fell through. While the deal now meets the competition requirements of the Austrian regulator, BWB, it also furthers the European Commission’s goal of encouraging the creation of regional telecommunications groups that can offer state-of-the-art wireless service across the single market of the European Union’s 27 members.
“We are not necessarily expecting a flood of M.A. to occur if the Austrian purchase is approved,” Mr. Guille said, referring to mergers and acquisitions. “But it could mean one less obstacle.”
The creation of regional operators that can sell cross-border service simultaneously within several E.U. countries could bolster competition in individual countries and, at least theoretically, lead to lower prices for consumers. Currently, operators are required by E.U. and national laws to treat each national market as a distinct entity, contributing to limits on domestic retail opportunities and the rise of an oligopolistic status quo in some countries.
A new level of regional competition in the industry could lead to more vigorous direct competition between Telefónica of Spain, Vodafone of Britain, Deutsche Telekom and Orange of France, the big operators that until now have mainly avoided the home markets of their peers. If mergers were easier to pursue, Orange and the T-Mobile subsidiary of Deutsche Telekom, which have steered clear of each other’s domestic markets, could theoretically go head to head in France and Germany.
Maritheres Paul, a spokeswoman for 3Austria, said the company was optimistic that Mr. Almunia would approve the takeover of Orange Austria, which was announced in February.
“We’ve been negotiating with the E.U. for nearly a year now,” Ms. Paul said. “We think that we have met everyone’s concerns and are hopeful for a positive decision.”
Mr. Almunia took up the Austrian case at the request of that country’s regulator, which had initially voiced concerns about losing a mobile network through the combination. Antoine Colombani, a spokesman for Mr. Almunia, declined to comment on the case.
Mergermarket says that the level of merger activity in the European telecommunications sector has fallen for two consecutive years amid the global economic slowdown and the financial difficulties of Southern Europe.
The volume of mergers and acquisitions in the sector has fallen to €16.3 billion, or $21.1 billion, so far in 2012, less than half the €35.4 billion in 2010 and down 59 percent from a peak of €39.7 billion in 2007 before the financial crisis took hold, according to Mergermarket.
Over the past decade, the European telecommunications sector has been largely devoid of big acquisitions that defined the early phase of the industry. But the economic downturn has led operators to pursue a series of smaller mergers and network-sharing arrangements.
Article source: http://www.nytimes.com/2012/12/10/technology/10iht-telecom10.html?partner=rss&emc=rss
