Telecoms.com – Orange acquisition of Bouygues Telecom said to be close to completion

Telecoms.com spoke to Bengt Nordström, CEO of telecoms consultancy Northstream, who has been keeping a close eye on consolidation moves in the European telecoms market.

“This development was preceded by a period of very intense price competition between the operators, which is now forcing them to seek scale and save costs through mergers and consolidation,” said Nordström.

“In many ways, this is similar to what we’re seeing in the UK, where BT and EE have merged to become a dominant and fully converged operator. However, the difference is that the UK regulator Ofcom does not like to approve further consolidation in the market, including the proposed merger between O2 and Three.

“In France, authorities accept that the market needs a different structure when it has stopped growing and is stagnating. They are sacrificing the four-player mobile operator market but are ensuring that the market still has strong players for French consumers and enterprises to choose from for their telecom and media services.

“In contrast, in the UK authorities are about to create a situation where they have one very large fully converged operator – BT/EE – with around £24 billion in revenues. The next biggest operator will be O2 with around £6 billion in revenues. If the goal is to bring back to the UK a structure of how the telecom market looked like before privatisation 30 years ago, then the authorities are doing a pretty good job.”

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Hutchison Whampoa’s planned £10.25 billion ($14.3 billion) takeover of UK mobile operator O2 is heading for the skids, according to Bengt Nordström, the CEO of consultancy and market-research company Northstream. Hong Kong-based Hutchison Whampoa Ltd. (Hong Kong: 0013; Pink Sheets: HUWHY) hopes to merge O2, currently owned by Spain’s Telefónica , with its own 3business [...]
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