EU Commissioner calls for harmonization of frequency allocation and increased consolidation in European telecom sector

Thierry Breton, EU Commissioner for the Internal Market, has called for harmonization of frequency allocation throughout Europe. In his speech at MWC Barcelona, Breton explained that the coveted and scarce spectrum should no longer be allocated to the highest bidder. Instead, it should go to the network operator that commits to increased investment and faster expansion. Breton emphasized that we cannot afford any further delays in frequency allocation in the race towards 6G. There must no longer be major differences in the schedules for auctions and infrastructure deployment among member states. He referred to the experiences with 5G, where the auction process is still not completed after eight years.

Meanwhile, in Germany, there is a discussion about extending the licenses for certain mobile frequencies, which expire in 2025, for a few more years instead of conducting a new allocation. The plans of the Federal Network Agency are causing significant concerns for both 1&1 and the Federal Cartel Office, as 1&1 sees itself significantly disadvantaged by this.

For Breton, a unified allocation of frequencies is also a crucial element for creating a true internal market. He is among the advocates for increased consolidation of the European telecommunications sector. According to Breton, network operators need both size and flexibility to adapt to this technological revolution and make the enormous investments profitable.

Currently, there is too much fragmentation in our regulatory framework. The creation of a true telecommunications internal market is still hindered by numerous regulatory barriers. These include obstacles to frequency acquisition, consolidation measures, reporting requirements, security aspects, and much more.

Last week, the Commission presented its proposal for a Digital Networks Act. With this step, Brussels aims, among other things, to harmonize the different regulations for the telecommunications sector. Furthermore, the goal is to strengthen the internal market through cross-border mergers of network operators.

So far, the European Commission has viewed mergers in the telecommunications market rather critically. It has made sure that there are no fewer than three or four providers in the member countries. An example of this is the Commission’s decision in 2016 to prohibit the merger of O2 and Three in the UK. Margrethe Vestager was responsible for competition at that time and is now Vice-President of the European Commission for the Digital Age.

Although Vestager presented the Digital Networks Act herself last week, she does not want this to be interpreted as a signal that the EU will be lax in merger control. At MWC Barcelona, Breton argues for demystifying the question of the optimal number of network operators. There is no magic number in this area. It is important to have a broader view of markets and their participants as technologies and services increasingly converge.

Nevertheless, the European Commission recently approved a controversial merger in the European telecommunications market. By forming a joint venture between the network operator MsMvil and Orange, the largest provider by customers can emerge in Spain. However, it is required that MsMvil allocates spectrum to the leading virtual network operator Digi and provides a roaming offer to enable it to build its own network.

Schlagwörter: Thierry Breton + MWC Barcelona + Brüssel

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