The telecoms sector has thrown its weight behind the new European Commission’s plan to create industrial champions and overhaul its approach to competition policy.
A letter signed by the chief executives of some of Europe’s largest telecoms companies states that they would support the move to provide Europe with an “industrial policy for digital leadership” which could provide a boost for the struggling sector in its battle with giant US technology companies.
The move is a signal of support for the political priorities set out by Ursula von der Leyen, the new president of the European Commission, and Thierry Breton, the former France Télécom chief executive who has been appointed as commissioner for the internal market.
The letter will be published ahead of a meeting in Brussels on Monday between Margrethe Vestager, the EU’s antitrust chief who now oversees EU digital policy in addition to her competition responsibilities, and powerful telecoms figures including Tim Höttges, chief executive of Deutsche Telekom, and Stéphane Richard, head of Orange.
Ms Vestager has proved a divisive figure in the telecoms sector having blocked mergers in Denmark and the UK which slowed the consolidation of the European market. The review of competition policy and a focus on a new industrial strategy, however, could open the door to a different approach.
The heads of the telecoms companies said they wanted to work with the commission to “turn ambition into reality”.
“This requires a stable and sustainable regulatory environment at home, but also fair and balanced rules for competing with global players,” the letter said. It also called for the commission to “actively address the fragmented European telecom market” by encouraging companies to build more national and cross-border scale in telecom infrastructure.
The letter was signed by the chief executives of Deutsche Telekom, Orange, BT, KPN, Telecom Italia, Telefónica and eight smaller incumbent telecoms companies that form the European Telecoms Network Operators (ETNO) grouping. Nick Read, chief executive of Vodafone, and Mike Fries, chief executive of Liberty Global, also signed the letter in a rare sign of co-operation between incumbents and large challenger telecoms companies.
The letter will be published to coincide with the annual FT-ETNO summit in Brussels.
Stephen Howard, head of telecoms research at HSBC, said the debate around whether Europe’s competition policy was fit for purpose was driven by “the ghost of Alstom-Siemens”, the Franco-German industrial deal blocked by Ms Vestager in February.
Mr Breton has indicated that competition policies need to adapt as European companies battle with huge rivals in the US and China.
Mr Howard said those comments should sound encouraging for telecoms companies looking to better compete with global technology companies that have been constrained by the previous European approach to consolidation.
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