3's company, four's a crowd in mobile network merger frenzy
(Observer (UK) Via Acquire Media NewsEdge) The map of Europe's mobile networks is slowly being redrawn. Country by country, the number of big operators is falling from four to three and, if mergers in Ireland and Germany are given the green light, Britain could be next.
Speaking off the record last week, one European network boss said small member states would shortly have two operators, and the bigger nations "two plus one" - a couple of big players and one challenger network.
There is every sign that the European competition commissioner, Joaquin Almunia, believes three is company and four may be too much of a crowd to encourage investment in the 4G high-speed mobile data networks that are already carpeting America.
Speaking to reporters in Lithuania last week, Almunia said he had "no concerns" about Telefonica's proposed takeover of E-Plus, a move that would reduce the German market to three competitors. In Ireland, Hutchison Whampoa's 3 network wants to buy O2's local business, a deal that would also leave a choice of three.
Brussels wants Europe to look more like China and America - a single economic region with a few large players. America has four big mobile networks for a population of 313 million. Europe has 500 million inhabitants and maybe 100 networks (although many of them are owned by a handful of large companies).
A once hot industry has been chilled by recession, regulated cuts on call prices, and the internet's ability to offer for free the calls and written messages that once cost real money. Our calculations show the UK's four networks earned less than pounds 19.5bn in 2012, pounds 680m less than the year before.
The most likely candidates for a merger are 3 and O2. But for years 3 has argued the UK should be a four-player or even five-player market, saying its presence keeps rivals' prices in check. It argued vociferously for special treatment in the recent government spectrum auction. A merger now would involve an almighty public U-turn.
(c) 2013 Guardian Newspapers Limited.
[ Back To Technology News's Homepage ]