EU competition chief warns telecom firms against thoughts of major mergers

European competition chief Margrethe Vestager: 'No evidence suggests that more concentrated national markets lead to better outcomes.' Picture: AP/Virginia Mayo

Big telecoms mergers in Europe would cut competition and distort the eurozone’s prized single market, the EU’s competition chief Margrethe Vestager warned, in an apparent rebuttal of calls in a new EU report for more consolidation.

“No evidence suggests that more concentrated national markets lead to better outcomes,” Ms Vestager said at a conference in Brussels on Thursday. 

“To the contrary, it would lead to less competitive national markets and to a more fragmented single market.”

Ms Vestager’s comments come after a recent report from former Italian prime minister Enrico Letta to EU leaders, which recommended consolidation for telecoms operators as a way to improve the eurozone’s mobile and fixed networks. 

Mr Letta’s findings were seen as a boost for operators that have argued for years the sector was ripe for mergers.

Telecom companies have been lobbying for years to back so-called in-market mergers.

Meanwhile, Nokia said it had passed a low point for the year after reporting sales that missed estimates and forecasting a stronger second half. Net sales declined 19% to around €4.7bn in the quarter from a year earlier.

Nokia already forecast a demand recovery in the second half of 2024. Ericsson also said its sales would normalise in the second half.

• Bloomberg and Reuters