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EU telecoms regulation poses competitiveness dilemmas

Friday, January 22, 2016

Significance

The European Commission is reviewing the EU regulatory framework for telecoms. In reforming the framework, and adjudicating on current telecoms mergers, policymakers face a tension between two priorities: promoting international competitiveness and investment, which generally entails market consolidation and incumbent power; and maintaining competition in national markets, which typically involves liberalisation and tough antitrust policies.

Impacts

  • With Deutsche Telekom becoming BT's largest shareholder as a result of the latter's EE acquisition, closer ties are likely in coming years.
  • A full takeover is a possibility after the lapse of the three-year restriction on Deutsche Telekom increasing its 12% BT stake.
  • This would require a shift in stance from the EU competition authorities, given their misgivings over more modest telecoms concentrations.

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