Telefónica has called on the European Commission to reform how mergers are assessed in the EU, arguing for a shift away from static price-based models toward a broader understanding of consumer welfare that prioritizes innovation, resilience, and long-term investment. In a detailed policy statement, Telefónica’s Competition Counsel and Corporate Regulation Manager outlined why the current EU Merger Control framework is insufficient for addressing the strategic needs of the digital economy.
Although the current Commission missed an opportunity to revise the EU Merger Control Regulation itself, Telefónica welcomed the mission letter to Executive Vice President Teresa Ribera and the Competitiveness Compass, both of which mandate an update to the Horizontal Merger Guidelines. These updates are expected to better account for the investment intensity, innovation cycles, and strategic challenges in key sectors like telecommunications, cloud infrastructure, and digital platforms. The Directorate-General for Competition (DG COMP) has already launched a consultation, though Telefónica expressed concern that it may fall short of rethinking the core economic assumptions underlying merger control.
Telefónica advocates for a dynamic efficiency model that moves beyond price effects to include quality, choice, and especially innovation—dimensions it sees as essential for advancing consumer welfare in a modern economy. The company argues that such a model better reflects the complexity of real-world markets and aligns with the EU’s broader objectives, including digital sovereignty and technological leadership.
- Telefónica urges the EU to adopt a dynamic efficiency framework in merger reviews
- Current price-cost models are seen as too narrow for assessing strategic sectors
- DG COMP has opened a public consultation, but Telefónica warns it lacks depth
- Innovation cycles, production functions, and investment risk must be better understood
- A broader view of consumer welfare—including quality and choice—is needed for reform
“As a starting point for the revision of the Guidelines, the Commission needs to recognize and apply the full scope of consumer welfare, which encompasses much more than price effects,” wrote Telefónica’s Fernando Herrera González.
🌐 Why it Matters: Telefónica’s push underscores growing frustration among EU telcos and digital infrastructure providers that regulatory frameworks are out of step with competitive realities. If adopted, a more innovation-focused merger policy could encourage cross-border consolidation and investment in next-generation networks—key to the EU’s digital ambitions.
- The merger between Orange and MásMóvil in Spain, announced in July 2022 and valued at approximately €18.6 billion, resulted in the establishment of a 50/50 joint venture named MasOrange, which was formally completed on March 26, 2024, after securing conditional approval from the European Commission in February 2024. 29 37 To mitigate competition concerns, the parties divested spectrum assets to Digi Communications, facilitating the emergence of a fourth mobile network operator in the market. 41 The combined entity, serving over 37 million broadband and mobile customers, has focused on synergies exceeding €490 million annually by the fourth year and committed to €4 billion in investments for 5G and fiber enhancements; by February 2025, MasOrange had further solidified its infrastructure through a long-term alliance with Cellnex for network services. 30 33 39
- Swisscom’s acquisition of Vodafone Italia, announced in March 2024 for €8 billion, was successfully completed on December 31, 2024, following approvals from key regulators including the European Commission in August 2024, marking the integration of Vodafone’s operations with Swisscom’s subsidiary Fastweb to form a converged telecommunications leader in Italy. 1 2 11 The deal combines Fastweb’s fixed-line expertise with Vodafone’s mobile strengths, aiming to enhance service offerings and market position. By May 2025, Swisscom reported a 40% revenue increase in its first-quarter results attributable to the acquisition, while confirming full-year guidance and advancing integration processes to realize operational efficiencies. 0 4 3
- The merger of Vodafone UK and Three UK, valued at £16.5 billion, was completed on May 31, 2025, after receiving clearance from the UK’s Competition and Markets Authority in March 2025, creating the largest mobile operator in the country with Vodafone holding a 51% stake and CK Hutchison retaining 49%. 16 20 27 Serving approximately 27 million customers, the joint venture has pledged to invest £11 billion over the next decade in expanding 5G standalone networks and improving coverage in underserved areas. The deal is projected to yield £700 million in annual cost and capital expenditure synergies by the fifth year post-completion, while committing to maintain affordable tariffs and create thousands of jobs. 14 15 23
