Operators encouraged after talks with EC competition commissioner
The European Union has reportedly held talks with a number of major telecoms companies about the possibility of creating a pan-European infrastructure network in order to consolidate the existing fragmented structure of national markets.
According to the Financial Times, EC competition commissioner Joaquin Almunia met with a number of organisations, including Deutsche Telekom, France Telecom, Telecom Italia and Telefonica, and sources indicated the operators were keen on exploring the concept following the discussions.
EU mobile talks
The EC has typically been opposed to national mergers that impact competition, but is believed to be more willing to approve cross-border initiatives that would create benefits such as a single pricing for telecoms and Internet services across Europe.
The merger between Orange and T-Mobile in the UK was only approved by the Commission after the newly formed Everything Everywhere (EE) agreed to sell off some of its combined spectrum.
It has been noted that creating such an infrastructure would be very difficult due to the financial and technological challenges associated with such a project, but the operators remain interested in pursuing the idea.
The companies need to invest in next generation fibre and mobile networks but are faced with declining revenues and are being challenged by other technology companies using their networks.
One solution could involve the creation of a “newco” that would pool participating companies infrastructure along with the debt associated. This would then be used one a wholesale basis with financial incentives in place for those who contribute to the network.
Last year, Telefonica UK and Vodafone announced plans to create a shared national grid of 18,500 network sites. The project was given approval by the Office of Fair Trading last October.
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