EU Commission Reviews Merger Guidelines to Boost Telecom Consolidation

The European Commission has initiated a public consultation to revise its merger guidelines, a move that could facilitate significant consolidation within the telecommunications sector, as expressed by industry experts. This consultation, which is open until September 3, 2025, aims to reassess how mergers and acquisitions are evaluated, particularly concerning their competitive impacts in key markets such as telecommunications and digital sectors.

The introduction of revised merger guidelines is seen as a potential catalyst for the emergence of 'European champions'—larger telecommunications entities capable of competing on a global scale, particularly against firms from the United States and China. Dr. Marc Salevic, a connectivity and digital infrastructure expert at Pinsent Masons, noted, "The review could clear the path for consolidation and the establishment of significant players in the European market."

In recent years, the EU has faced criticism for maintaining regulatory frameworks that discourage mergers, thereby fragmenting the telecommunications industry across member states. Historically, mergers within the telecom sector have been evaluated based on national markets due to regulatory barriers, which has hindered the sector's ability to scale effectively. Paul Williams, a competition law expert at Pinsent Masons, stressed that the Commission is now considering how a broader, global perspective could justify consolidation in critical infrastructures without compromising competition.

The push for reform aligns with calls from member states seeking to enhance the EU's competitiveness, particularly in light of escalating technological advancements and geopolitical uncertainties. Notably, a joint statement by German Chancellor Friedrich Merz and French President Emmanuel Macron underscored the necessity for EU-level competition rules that would support the creation of globally competitive European firms in crucial sectors.

This review follows a 2024 report by former European Central Bank President Mario Draghi, which underscored the 'existential threat' the EU faces due to stagnant economic growth. Ursula von der Leyen, President of the European Commission, also highlighted the need for updated guidelines to address the strategic needs of various sectors, considering recent changes in the defense and security landscape.

The Commission's efforts to revise the merger guidelines reflect a broader ambition to modernize its approach to competition policy in the digital age. This initiative could reshape the telecommunications landscape in Europe, allowing for greater investment and innovation in the sector, which is increasingly vital for the continent's economic resilience.

As the consultation period progresses, stakeholders from the telecommunications industry are expected to voice their opinions, advocating for a regulatory framework that fosters growth while ensuring fair competition. The outcomes of this review will not only influence the telecommunications sector but could also set precedents for how mergers and acquisitions are managed in other strategic industries throughout Europe.