EU May Ease Rules on Telecom Mergers and Seek Big Tech Funding for 5G Rollout

In a bid to accelerate the deployment of 5G networks across the European Union (EU), regulators are considering easing restrictions on mobile telecom mergers while also exploring avenues to enlist the support of Big Tech companies for funding, as revealed in a European Commission document obtained by Reuters.

The document, slated to be presented by Commission Vice-President Margrethe Vestager on February 21, suggests potential changes to EU antitrust regulations, aiming to address concerns raised by major telecom players such as Deutsche Telekom, Orange, Telefonica, and Telecom Italia. These companies have long advocated for relaxed regulations regarding mergers, especially those that could reduce the number of mobile operators from four to three.

Currently, EU regulations frown upon mergers that diminish competition unless significant remedies are proposed. However, the document highlights the challenges posed by a fragmented market, particularly along national borders, which may hinder operators’ ability to invest in the infrastructure necessary for the future, such as 5G networks.

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With approximately 50 mobile operators and over 100 fixed operators within the EU, the document questions whether cross-border consolidation or other forms of cooperation could enable operators to attain the scale required for substantial investments without compromising competition.

Moreover, the document emphasizes the convergence between electronic communications networks and cloud services, suggesting that the scope of current telecom regulations might need to be broadened to accommodate these changes. It aims to ensure a level playing field and equivalent rights and obligations for all stakeholders and end-users of digital networks.

One significant proposal put forth in the document involves enlisting the support of major tech giants including Alphabet Inc.’s Google, Meta (formerly Facebook), Amazon, Netflix, Apple, and Microsoft. These companies collectively account for over half of internet data traffic, and telecom providers argue that they should contribute to the funding of network upgrades, particularly for 5G.

The document signals a potential shift in EU telecom policy towards a more collaborative approach involving both traditional telecom operators and major tech firms. However, any changes would be subject to feedback from stakeholders and careful consideration by EU regulators.

Source: Reuters