Seeking Alpha

EU plan on roaming charges could lead to telco consolidation - analysts

  • The EU's plan to scrap roaming charges for incoming calls from July 2014 and put a limit on other tariffs, which it announced yesterday, could leave the telecom sector open to more consolidation if the rules come into force, analysts reckon.
  • "Margins are going to be wafer-thin," says CMC Markets' Michael Hewson. "There are already too many companies operating in Europe...and with these new rules, the capacity for European companies to make a profit will be greatly reduced.
  • However, Hewson points out that the regulations will only apply to calls and not data, which tends to be more expensive.
  • Companies that will be hit by the rules include Telefonica (TEF), Vodafone (VOD) and Orange (ORAN), and it makes you wonder whether AT&T (T) will still want to make acquisitions in the EU.
Comments (3)
  • Having a phone is nwt up there with food and shelter. Every teenage girl in the EU has a phone and uses it hourly. The phone companies are all doing just fine, even with regulations. Buying a phone company is a slam dunk. If you want expensive phone rates look to Mexico were I live. The phone company here is owned by Carlos Slim. Enough said.
    12 Sep 2013, 09:26 AM Reply Like
  • I feel AT&T should concentrate its resources here in the US so VZ doesn't find the opportunity to do a little butt kicking.

     

    -rwm
    12 Sep 2013, 11:20 AM Reply Like
  • "However, Hewson points out that the regulations will only apply to calls and not data, which tends to be more expensive."

     

    -This is the most important point that will probably be overlooked initially by investors.
    13 Sep 2013, 08:09 AM Reply Like
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