EU: As telco chief gears up for single telco market, Vodafone puts pressure on rivals

Following $130B deal with Verizon, Vodafone’s “Project Spring” may spark more merger activity throughout Europe’s telecommunications as EU telecoms chief Neelie Kroes prepares to announce consolidation plans next week.

Vodafone’s “Project Spring” operation is part of efforts to strengthen EU mobile networks by raising $9 billion or infrastructure updates. The investment will pump money not only in the EU market, but also in emerging telco markets like India and South Africa, say reports.

Some of that funding will come from Vodafone’s recent $130 billion deal with Verizon. As higher quality is becoming more vital to win over customers, competing telco firms may soon look into their own merger deals and follow a similar infrastructure-investing path, say reports.

Such a merger spree could erupt as Kroes is expected to reveal plans for a consolidated EU telco market on September 11 in order to strengthen the market’s competitive edge against the US and other developed mobile and broadband sectors.

In a statement Tuesday, Vodafone chief executive Vittorio Colao described Kroes’s upcoming plan as a sign that the European Commission “is getting clearly more pro-investment.” Additionally, Colao said, “Project Spring,” along with the emerging prominence of 4G mobile,” there is a window for number one or two players in each market to spring ahead and put more space between us and smaller players.

Reports say Telefonica within Spain, Germany and Britain is most likely to feel the pressure from Vodafone’s aggressive moves in the market.

Full Content: Reuters

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