Europe’s top 4 telco CEOs Timotheus Höttges, Christel Heydemann, José María Álvarez-Palleteand, and Margherita Della Valle urged regulators to ease the merger regulations

CEOs of the four biggest telecom companies in Europe, Deutsche Telekom (DT), France’s Orange Group, Spain’s Telefónica, and Britain’s Vodafone, recently gave a joint keynote address. During the address, they called for regulators to ease merger regulations to help European telecoms regain momentum. The CEOs urged for a “new deal” to be made to achieve this goal. In 2024, Timotheus Höttges, CEO of Deutsche Telekom, was ranked #33 among the Best CEOs In The World, followed by Margherita Della Valle from Vodafone (No. 221), Christel Heydemann from Orange Group (No. 243), and José María Álvarez-Pallete from Telefónica.

Margherita Della Valle, Vodafone CEO, believes that allowing local in-market consolidation in Europe would be beneficial. She also stated that it is illogical to have multiple 5G networks operating simultaneously. “In the 5G world, it is absolutely impossible to have economic returns on so many networks built in parallel.” Four to three mergers are typically blocked. When allowed, as recently happened in Spain with Orange and Másmóvil, authorities usually open the door for a new network.

Timotheus Höttges from Deutsche Telekom cited the successful merger of DT’s T-Mobile US with Sprint as a model for market consolidation. He criticized the requirement for a new, fourth operator to be established as a remedy for mergers in Europe. “In the US, spectrum gets sold … you own it for your life,” said Timotheus Höttges, Deutsche Telekom’s CEO. “In Europe, every 20 years, we run into an auction. Germany since 2000 has taken €65 billion [$70 billion] out of our ecosystem – Vodafone, Telefónica, Deutsche Telekom – to get it as a tax for the government.”

Both Deutsche Telekom and Vodafone have demonstrated their willingness to sell assets in markets where they are unable to compete. During a keynote address, Höttges stated that Deutsche Telekom will exit markets if it believes the market structures are not working. Top executives from the European telecom industry came together at their annual gathering in Barcelona this week to urge regulators and governments to be more understanding of their challenges. The industry is facing low growth, high costs, and demands for major capital expenditures amid permanent technological change.

The bosses of the four leading telecom operators in Europe – Timotheus Höttges from Deutsche Telekom (DT), Christel Heydemann from Orange Group, José María Álvarez-Pallete from Telefónica, and Margherita Della Valle from Vodafone – held a rare joint panel at the Mobile World Congress. They all agreed that Europe is far from becoming a single telecom market.

European telcos cannot hope to match U.S. tech giants for financial clout. The combined market capitalization of the companies managed by the four CEOs who shared a stage in Barcelona is 179 billion euros ($194 billion). That’s smaller than Netflix, and barely a tenth of Amazon and Google owner Alphabet.

M&A may breathe new life into Europe’s neglected telecoms:

This week, Vodafone announced exclusive talks to sell its Italian arm to Swisscom for 8 billion euros ($8.7 billion), adding to other potential transactions in the making. Telecom Italia is selling its fixed-line network to private equity investor KKR for up to 22 billion euros in a “game-changing” deal. Orange and MasMovil got Brussels’ conditional clearance in February for their 18.6 billion euro tie-up in Spain, while unlisted telecoms group Iliad took a $1.3-billion stake in Sweden’s Tele2, as its top investor, French billionaire Xavier Niel, seeks to push consolidation.

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