EY comments on Jean-Claude Juncker recent remarks on rethinking EU competition rules

17 April 2014

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Adrian Baschnonga, Lead Analyst for Global Telecommunications at EY, comments on Jean-Claude Juncker recent remarks on rethinking EU competition rules:

"Greater opportunities for consolidation could act as a vital antidote to tough market conditions in Europe's telecommunications sector, in turn prompting operators to invest more in new network capabilities. Although the European Commission has recognised that single market reforms are needed across the continent, the lack of clarity on rules surrounding M & A remains one of the key uncertainties in the sector.

"Operators are keener than ever to preserve profitability in the light of rising demand, disruptive competition and falling prices, yet existing antitrust rules present a significant obstacle to improving market structures. At the same time, take-up of 4G mobile services in a fragmented European market remains well behind levels in the United States and parts of Asia.

"The EC's Connected Continent package focuses on contentious issues such as net neutrality, yet antitrust attitudes are now the major theme in some of Europe's largest markets, with a number of national governments now seeing the merits of consolidation. In this light, there is the risk of a growing gulf between national and regional attitudes towards improving market structures at a time when other regions are overtaking Europe in terms of network coverage and capability."