Is a New Wave of Telco Mergers in Europe About to Begin?

By Gary Kim June 15, 2012
How big will a service provider have to be in the European market to survive and thrive in the next phase of telecom industry evolution? It's a logical question now that Latin American mobile operator, America Movil has acquired a 21 percent stake in Telekom Austria, a move that is not expected to be the last such move by America Movil, to say nothing of what other firms might ultimately attempt as well.

America Movil will purchase five percent immediately, taking its current stake in Telekom Austria to 6.7 percent, and expects to buy the remainder later in 2012.

America Movil already has acquired 8.12 percent of KPN, the Netherlands telecom company, and the latest investment represents the third increase in just a week's time. Those moves are likely to spur additional defensive or offensive moves elsewhere in Europe’s telecom market. 

Consider that France Telecom's CEO, Stephane Richard recently told the telco's annual shareholder meeting that the recent bid by Mexico's America Movil for a substantial holding in The Netherlands' KPN could spark a wider shake-up in the European market

So how big might a firm have to become, to maintain European leadership? Fairly substantial, it might appear. Between them, Deutsche Telekom and France Telecom have a combined annual revenue of about 104 billion euros, about US$131 billion. 

The other observation might be that if France Telecom believes it is too small, at $46 billion euros, it suggests all other firms smaller than that might have to rethink their options as well. To be sure, consolidation in the telecom industry is nothing new. It has been a part of the U.S. industry for over 100 years, in virtually every segment of the business.

But it appears a new round of consolidation is about to begin in Europe.

Edited by Brooke Neuman

Contributing Editor

Related Articles

Jeff Bezos, Elon Musk Square Off on Rocket Firsts

By: Doug Mohney    11/25/2015

On Monday, November 23, Blue Origin successfully flew the first fully reusable rocket into space, giving the company first bragging rights. Founder Je…

Read More

Autonomous Car Technology Takes New Leap Forward With Ford, Uber

By: Larry Alton    11/24/2015

The age of the self-driving car is nearly upon us, or at least that's what major technology and automotive companies are hoping. There have been major…

Read More

Unusual but Fun Tech Ideas for 2015

By: Rob Enderle    11/24/2015

Well, it's the week of the big sales, and many of us are planning to buy that special someone a special something. I figured I'd join my peers and poi…

Read More

Locus Telecommunications is Challenging the FCC's Authority, Claiming Due Process Violations

By: Special Guest    11/24/2015

One of a handful of prepaid calling card companies slapped with a $5 million fine by the Federal Communications Commission (FCC or Commission) for its…

Read More

Kaspersky: Three Out of Four Users Have Trouble Spotting Big Threats

By: Steve Anderson    11/23/2015

We all know that spending on cybersecurity has been on the rise lately, as everyone from major corporations to military groups ramp up their cyberdefe…

Read More