The field of action for a few is the telecommunications sector

By Matina Harkoftakis

The telecommunications industry in Europe is looking to find its footing again in order to break out of the impasse it has fallen into in recent years. In this direction, the sale of assets and mergers, which, however, are opposed by the regulatory authorities, are often put on the table of options.

The reality is that in most European countries there are 3 or 4 telecommunications providers, which cross swords to claim shares mainly in small-sized markets, which are certainly smaller compared to those in America and Asia.

In any case, however, this competition can work positively for the pocket of consumers as it pushes for lower prices, but it equates to a smaller profit margin for the companies, which are also required to implement significant investments at the level of infrastructure for a fifth generation network and optical fibers. The mergers would further reduce the number of providers, but are opposed by regulators, who seek to preserve the competitive environment.

At the same time, they are concerned that a further concentration of the industry could lead to higher prices and a reduction in the quality of the products and services offered. It should be noted that the Spanish telecommunications companies Orange (second operator in Spain) and MasMovil (fourth operator) announced last year a merger agreement (remains subject to approval), the value of which amounts to 18.6 billion euros, while recently the Vodafone has announced its intention to sell its operations in Spain.

On the other hand, these moves seem to test the endurance of the regulatory authorities of the European Union, which do not hide their concern for the course of the telecommunications sector.

Another issue that has recently fallen on the negotiating table is the request of the largest telecommunications providers in Europe, through which they ask the European Union to oblige the technological giants to contribute financially to the investments made for the network infrastructures, which it is capital intensive.

The demand for participation in the high cost of investments is addressed to Big Tech, such as Google, Meta (facebook, Instagram), Amazon and Netflix, which benefit from the upgrading of networks and are behind the increased data traffic.

Recently, in a joint letter signed by the heads of Europe’s 20 largest telecommunications groups, including Deutsche Telekom, Vodafone, Telefónica and BT, they note that “future investment is under severe pressure and regulatory action is needed to secure it”. , adding that “a fair and proportionate contribution from the largest traffic generators to the cost of the network infrastructure should form the basis of a new approach”.

As for the possibility that our country is called to take a position on the matter in the EU, it is most likely that it will not support the request of the telecommunications companies that Big Tech contribute to the cost of network infrastructure investments and will side with the technological companies, which categorically reject such a possibility.