* EU antitrust chief to decide on 2 telecoms merger deals in
* Telecoms sector wants antitrust rules to evolve with
By Foo Yun Chee
AMSTERDAM, March 7 Europe's antitrust chief
Joaquin Almunia, whose approval is required for Telefonica's
two merger deals in Germany and Ireland, said on Friday
that he was wary about the growing market power of fewer but
larger telecoms operators.
Almunia's concerns came as Deutsche Telekom,
Orange, Vodafone, Telecom Italia and
other providers urged EU Telecoms Commissioner Neelie Kroes to
help simplify merger rules and those related to spectrum sales.
The sector has pinned some of the blame for low investments
in faster 4G and fibre broadband on tough EU merger rules which
they say hinder the creation of large players which can plough
money into such projects.
"The industry says it needs to consolidate to invest in the
next-generation networks. However, allowing fewer, larger
players in individual EU countries would just reinforce market
power at that level," Almunia said in a speech during a visit to
Cape Town, South Africa, which was released by his office.
He said any mergers between telecoms companies would be
assessed in terms of the impact on domestic markets rather than
on a pan-European scale because of the cross-border barriers in
the 28-country European Union.
Almunia will decide by May 19 whether to clear Hutchison
Whampoa to acquire Telefonica's 02 Ireland subsidiary
after the Hong Kong-based conglomerate offered concessions.
The Commission has set a preliminary deadline of May 14 to
decide on Telefonica's bid for KPN's E-Plus unit in
Germany. This could be extended if the Spanish operator submits
In their letter to Kroes, the telecoms companies said EU
antitrust rules should evolve "to support market-driven
restructuring" and that the sale of valuable spectrum by
governments should be revamped.
Signatories of the letter included chief executives from
Telefonica, Telekom Austria, Sweden's TeliaSonera
, Russian company Vimpelcom and Hutchison
Whampoa's deputy chairman.
Kroes' spokesman Ryan Heath said: "We agree on the need to
complete the telecoms single market. There is widespread
agreement on the damage caused by Europe's fragmented markets."