Vodafone has confirmed it is holding talks with rivals in several European markets about possible mergers and has urged regulators to keep an open mind when it comes to such transactions
Market consolidation has been a long-term ambition for the sector, with operators arguing that this would help cut costs and fund investments in full fibre and 5G infrastructure.
However, some regulators, including those in the UK, have traditionally been eager to maintain the status quo believing greater competition will reduce bills for consumers.
Vodafone consolidation
Vodafone had reportedly discussed a union with Orange last year – a move which would have created a European telecoms giant – and has also been linked with mergers with Iliad in Italy and Three in the UK. Both companies have much smaller market shares than Vodafone in each country.
Speaking to reporters after the publication of the company’s quarterly results, Vodafone Group CEO Nick Read said the company welcomed competition but believed the current situation is sustainable.
“I look at markets where I see a strong case for consolidation without the need for punitive remedies,” Read is quoted as saying.
“Those markets [are] Spain, Italy, the UK and now Portugal. Those four markets are the largest opportunity with a good and solid rationale. We are engaged with multiple parties in multiple markets. We will remain open-minded and pragmatic to work through the opportunities at pace.”
Vodafone is under renewed pressure from ‘constructive activist’ investor Cevin Capital which is said to have acquired a stake in the operator and is believed to be pushing for consolidation.
Suggestions are that European regulators are more receptive to such transactions than they were even five years ago, in recognition of the challenges faced by the sector and the need for investment.
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Via The Guardian
