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European mobile telephone operators are primed to enter a long-awaited phase of consolidation, the New York Times reports.
As growth slows, and as the need to cut costs and pay out millions for new, faster networks grows, longtime rivals are joining forces in markets across Europe to reap the benefits of economies of scale.
“You are going to see this happen more and more,” said John Delaney, an analyst in London at the International Data Corporation. “Fundamentally, there are too many network operators. Revenues are declining in the core services of voice and text, and the rise in data revenue is not making up for the shortfall.”
European policy makers are supportive. Neelie Kroes, the European commissioner for telecommunications, said that consolidation would help the Continent’s industry maintain its competitive position with rivals in the United States and Asia, where greater consolidation has allowed for faster adoption of new technologies.
“Having a few pan-European operators that are strong in the cross-border market would not necessarily be bad for competition,” Ms. Kroes said.
The advantages of merging among carriers go beyond bigger customer bases and revenues and superior coverage of wireless network grids. Operators also stand to save millions building the next generation of wireless data networks based on Long Term Evolution, or LTE, technology.
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