Telecoms Operators Must Invest in Broadband Infrastructure
Europe's telecommunications operators must invest in high-speed broadband internet as global peers eye the 27-nation bloc for acquisitions, its technology and telecoms chief said Tuesday, adding that she is preparing recommendations this summer to ensure that internet users understand, and get, the services they pay for--without unexpected restrictions.
"We have to have that investment in high-speed broadband," European Union Commissioner for the digital agenda Neelie Kroes said. If Europe's telecom companies don't invest the money in building fiber-optic networks and eventually reap the profits of doing so "then that is an opportunity for others" to step in and reap the profits in their place.
Mrs. Kroes spoke in a exclusive interview to The Wall Street Journal shortly before heading to the World Economic Forum in Davos where she will host a dinner for chief executives of telecom companies. "Quite a number of them" are from Latin America and from China, and they are looking with strong interest at the European market, she said.
U.S. telecom giant AT&T Inc. (T) is considering buying a counterpart in Europe, to get into a new wireless market where it can upgrade technology and offer more lucrative pricing strategies, people familiar with the carrier's thinking told The Wall Street Journal earlier this month. Last year, Mexican billionaire Carlos Slim's Latin American telecom empire America Movil SAB (AMX, AMX.MX) took stakes in Dutch operator KPN NV (KPN.AE) and Telekom Austria (TKA.VI).
There is also space for further consolidation within the EU, Ms. Kroes said. In December, her colleague responsible for competition, Joaquin Almunia, approved Hutchison Whampoa Ltd.'s (HUWHY, 0013.HK) $1.7 billion takeover of Orange Austria, after it offered major concessions to European Union regulators.
She hinted mergers would increasingly be looked at on a continent-wide basis.
"Those judgments of a merger are connected with a regional or national approach to what is best for the consumer," she said. "But we should think over what is the best for Europe in total."
Frances Robinson, Fox Business online here
Last Updated (Wednesday, 30 January 2013 10:32)