5G Rollout: EU Considers Loosening Merger Rules for Telecoms

EU regulators are exploring easing merger restrictions for mobile operators and potentially tapping into Big Tech coffers to accelerate the rollout of 5G networks, in a move that could reshape the European telecom landscape.

The revelation comes from a leaked European Commission document, obtained by Reuters, proposing potential changes to telecom regulations. Currently, mergers that reduce the number of mobile operators from four to three are generally frowned upon unless significant concessions are made.

Telecom giants like Deutsche Telekom, Orange, Telefonica, and Telecom Italia have long advocated for loosening these rules, arguing that the current fragmented market, with over 50 mobile and 100 fixed operators across the EU, hinders their ability to compete effectively with global tech giants and invest in advanced networks like 5G.

The Commission’s paper acknowledges this concern, suggesting that “cross-border consolidation or different forms of cooperation” could be explored to achieve economies of scale without harming competition.

Such a fragmented market “along national borders could impact the ability of operators to reach the scale needed to invest in the networks of the future, in particular in view of cross-border services,” the paper said.

Furthermore, it proposes broadening the scope of telecom regulations to encompass the growing convergence between communication networks and cloud services.

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“The Commission may consider the broadening of the scope and objectives of the current regulatory framework to ensure a level playing field and equivalent rights and obligations for all actors and end-users of digital networks,” it said.

The document also raises the possibility of holding Big Tech companies like Google, Meta, Amazon, Netflix, Apple, and Microsoft financially responsible for a portion of the 5G rollout costs.

These companies, who generate massive amounts of internet traffic, are seen as potentially benefiting the most from faster and more robust networks.

The Commission Vice-President, Margrethe Vestager, will officially present the proposal on February 21st, seeking feedback from all stakeholders before making any final decisions.

The move is likely to spark debate, with concerns about potential market concentration and the fairness of imposing costs on specific companies.