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.

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Comments (3)
  • stocknerd
    , contributor
    Comments (1503) | Send Message
    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
  • RWMostow
    , contributor
    Comments (1691) | Send Message
    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.


    12 Sep 2013, 11:20 AM Reply Like
  • Energysystems
    , contributor
    Comments (2112) | Send Message
    "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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