A new report by former European Central Bank President, Mario Draghi, recommends a shift in the European Union’s (EU) stance on telecom mergers to boost investment and competitiveness in the sector. The report, commissioned by European Commission President, Ursula von der Leyen, presents a series of proposals to enhance Europe’s economic performance and address critical challenges.
In the 69-page document, Draghi advocates for a more flexible approach to telecom consolidation to encourage higher investment in connectivity and innovation. He suggests that mergers should be evaluated based not only on the grounds of competition but also on the entity’s potential to foster investment and technological advancement.
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Draghi’s report highlighted that while the European Commission aims for pan-European consolidation, telecom operators have resisted it due to varying market conditions and regulatory environments across member states. Instead, Draghi proposes defining telecom markets at the EU level rather than by individual member states and calls for a similar strategy for spectrum licensing rules.
“The cornerstone initiative is modifying the EU’s stance towards scale and consolidation of telecoms operators to deliver a true single market, without sacrificing consumer welfare and quality of service,” Draghi wrote.
Additionally, Draghi recommends reducing barriers to in-country consolidation and focusing regulatory scrutiny on mergers that could lead to the abuse of market dominance. He also suggests establishing an EU-level body with public and private sector participation to create uniform technical standards for network APIs and edge computing, akin to the approach taken for roaming in the 1990s.
The report is now under review by von der Leyen, who will decide which recommendations to implement as part of the EU’s broader strategy to strengthen its economic and technological landscape.
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