• Industry groups urge EU merger reform to enable telecom consolidation and boost investment.
  • Structured consolidation is seen as key to improving network quality and global competitiveness.

Call for EU merger reform

The GSMA and Connect Europe—trade bodies representing European telecom operators—have urged the European Commission to go further in overhauling its merger control framework. In their response to the EU’s consultation on revised merger guidelines, they emphasise the pressing need for “a comprehensive reform of the EU Merger Regulation” to offer legal clarity and enable companies to achieve scale across the Single Market. They highlight that Europe’s telecoms landscape is highly fragmented—with over 100 operators serving on average 5 million subscribers each—compared with significantly fewer but far larger providers in markets like China and the US. The associations argue that current regulatory remedies, such as forced divestments to preserve a four-player market, often hinder investment rather than promote innovation.

Also read: European telecoms oppose EU plan to deregulate networks

Importance of scale and investment

Europe’s telecom industry operates in a capital-intensive space, where scale is increasingly essential to deploy advanced technologies like 5G, fibre networks, and secure infrastructure. The GSMA and Connect Europe stress that without consolidation, operators will struggle to generate the long-term returns needed to drive innovation and network resilience. Aligning with recommendations from figures like Mario Draghi, they urge the EU to shift focus from value-destroying remedies to forward-looking assessments that recognise efficiencies and investment potential.

Also read: Europe 2025 GCCM Berlin: Telecom networking insights

Rising M&A momentum

Notably, this push comes as activity heats up—reports suggest Telefónica may pursue Vodafone Spain, though approval is uncertain due to regulator scrutiny. Meanwhile, Telefónica is planning investments in data centres and cybersecurity services as part of a broader strategy to bolster its case for consolidation and strengthen digital sovereignty. Other consolidation moves are also afoot: French operators, including Orange, Bouygues and Iliad, are exploring a carve-up of SFR in a move that could reduce operators in France from four to three. The EU’s stance now could determine whether these deals become commonplace or remain stalled by structural fragmentation and regulatory resistance.

A case for consolidation

Enabling consolidation—when appropriately structured—could help European telcos deliver faster and more reliable network deployment without undermining consumer value. Larger-scale operations across markets may foster innovation, efficiency, and stronger global competitiveness. Building stronger European telecom champions is increasingly important to ensure sufficient investment in next-generation infrastructure and to safeguard digital autonomy, particularly against the backdrop of geopolitical pressures and rising cybersecurity threats.