The chief executive of French telecoms group Orange has said the proposed merger of German operators Telefonica O2 and KPN could signal a major shift in European communications markets. Speaking to Bloomberg, Stephane Richard said that the planned tie-up is an important test case for anti-trust regulators, both in Germany and at the European Commission (EC). ‘If Germany accepts to go from four carriers to three, it will create an earthquake in Europe,’ Richard told Bloomberg. ‘It will force other countries to reconsider their positions on consolidation.’
The executive said that his own Orange group would be interested in mergers in markets including Spain and Poland, saying that he believed the optimum number of competitors per market would be three, not four. In France, for example, the entry of fourth cellular operator Free Mobile in January last year caused a major price war which has hit Orange hard in its domestic market. Spain and Italy are other major European markets where the wireless sector is home to more than three players. ‘Recent deals in the telecoms market have shown that politicians have sometimes underestimated the reality of our industry, with the heavy investments it entails,’ Richard added. He went on to say that Orange would also consider buying up fixed line players in Belgium and Romania where it currently provides solely wireless services.