FT Orange CEO slaps down 'pan-European network' rumours

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Suggestions that Europe's largest operators were thinking of merging their networks have been quashed by France Telecom Orange's CEO Stéphane Richard.

"There was never any question of building a pan-European network," Richard told a press conference this week, according to La Tribune.

This reaction follows reports carried by the Financial Times that the mobile operator execs were discussing the creation of a pan-European infrastructure network to unite the continent's fragmented national markets.

The concept of pooling infrastructure first emerged during private talks between the EU's Competition Chief Joaquín Almunia and the CEOs of Europe's biggest groups, including Deutsche Telekom, France Telecom, Telecom Italia and Telefónica, according to the FT.

Sources close to the discussions claim that the CEOs departed the meeting with the aim of exploring the idea further, driven by their growing frustration with the way Europe's disjointed market has impeded their ability to compete.

However, Richard seems to have moved away from this consensus indicating that he only wants "awareness" in Brussels for the need to break with the previous model of regulation and foster a more favourable investment environment.

Fitch Ratings is also doubtful that a pan-European network can work given the technical challenges and likely opposition from domestic regulators.

The firm claims that the benefits of a deal would vary widely between operators depending on their existing market share and key topics such as spectrum holdings, making a workable agreement hard to negotiate.

'Even if companies and local regulators reached a deal in principle, technical hurdles would be high and practical issues including language barriers would also create difficulties,' Fitch said in a statement.

For more:
- see this La Tribune article (translated via Google Translate)
- see this Financial Times article (reg. req.)
- see this Fitch Ratings statement

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