EU's Almunia defends merger rules against telecoms criticism
BRUSSELS Feb 28 (Reuters) - The EU's antitrust chief rejected calls by telecoms operators to adopt more benign rules for mergers in the sector, blaming the fragmented market rather than competition regulations for holding up investment.
European telecoms groups have been slow to invest in faster 4G and fibre broadband, putting some of the blame on rigorous EU merger rules for hindering consolidation. This has fuelled concerns the region could lag behind the United States and Asia.
But EU Competition Commissioner Joaquin Almunia said on Thursday the criticism was unfounded.
"EU merger control does not stand in the way of creating large and successful European corporations," he told the European Competition Forum in Brussels.
Earlier this week, EU Telecoms Commissioner Neelie Kroes underlined the need for a genuine regional market underpinned by more consistent rules.
Lobbying group the European Telecommunications Network Operators' Association (ETNO) has urged EU antitrust regulators to allow more mergers within individual countries in exchange for backing Kroes' efforts to create a regional market.
But Almunia said regulators have to take into account the dominance of four large telecoms providers in Europe, and the existence of 27 national markets, when reviewing telecoms mergers, rather than looking at the market as a single bloc.
He also said consumers may still face high prices in domestic markets, even after the creation of a single telecoms market.
"The risk here is that some incumbents could play an asymmetric game, in which they can move in the single market without restrictions, whereas their users and business customers cannot escape from their national borders," Almunia said.
He also said he was not convinced by operators' promises of more investments in return for less stringent merger rules.
"As long as markets remain fragmented along national borders, there is no evidence that operators will invest more if they scale up," he said.
ETNO members include Deutsche Telekom, France Telecom's Orange unit, Telecom Italia, KPN , Telefonica and Telenor. (Editing by David Holmes)
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