MOBILE IN-MARKET CONSOLIDATION IN WESTERN EUROPE: IMPACT OF RECENT MERGERS ON MARGINS AND MARKET SHARE

Markets with three mobile players are likely to be more rational in terms of price competition, because mergers usually involve small operators that aim to win market share by destabilising commercial strategies.
The announced acquisition of E-Plus by Telefonica in Germany – which is subject to regulatory and shareholder approval, and which has been followed by America Movil’s intention to take over KPN – brings the number of mobile in-market consolidation deals in Western Europe to eight during 2005–2013. Mergers have mainly taken place between third and fourth players. If regulators approve the proposed M&A deals between challenger mobile operators in Germany (Telefonica/KPN) and Ireland (Hutchison 3G Ireland (3)/Telefonica), the number of countries in Western Europe with three mobile players will exceed that of countries with four players.
This Viewpoint provides:
details of the eight mobile in-market consolidation deals that have taken place in Western Europe during 2005–2013
detailed analysis of the following major outcomes of the recent mobile in-market mergers:
Such deals have resulted in incumbents winning greater mobile subscriber market share.
The merged entities have generally improved their EBITDA margins, bringing them closer to those achieved by the incumbent mobile operators.
our latest forecasts on the mobile telecoms market in Germany, where revenue looks set to decline from 2013 onwards
details of the intense M&A activity in Germany, with two major deals announced recently: the mobile merger between Telefonica and E-Plus, and the fixed–mobile play of Vodafone bidding for Kabel Deutschland.