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European telecoms groups are turning to growth outside the continent as they argue that restrictive merger rules are holding them back from growth in their domestic markets.
Vodafone and Orange said at a conference this week that regions including Africa, the Middle East and Turkey were key “growth drivers”, offsetting sluggish growth on the continent.
Their comments came as six telecoms groups including Telefónica, Nokia, Deutsche Telekom and Ericsson called on Brussels to relax existing merger rules, at the Mobile World Congress in Barcelona, in order to drive consolidation and investment.
In a keynote presentation, Deutsche Telekom chief executive Tim Höttges said Europe “needs a DOGE” to address Brussels overregulation, while Telefonica’s Marc Murtra said Europe’s position in the world would “continue to dwindle” should the EU not listen to calls for change.
Telecoms groups have long argued that the EU should loosen rules to make it easier to secure tie-ups that reduce the number of mobile operators in a market from four to three, claiming that the fragmented nature of the industry makes it hard for companies to invest in areas like 5G.
The European telecom sector has battled low growth for years, with real-term revenues down 4.4 per cent in 2023 according to a January 2025 Connect Europe report.
As a result, companies have been pursuing higher sales in regions outside the continent.
In third-quarter results last month, Vodafone said Turkey and Africa were driving growth, with the latter posting an 11.6 per cent rise in organic service revenue, compared with a 6.4 per cent fall in Germany — its largest market.
Chief executive Margherita Della Valle told the Financial Times that Africa offered opportunities “for scale”, due to the continent’s “typically three player markets”. Africa now accounts for 20 per cent of group revenue.
Della Valle cited the company’s upcoming merger with Three’s UK business as evidence that market consolidation would help boost scale and investment in networks.
The UK competition regulator said the deal would be allowed to proceed if the companies agreed to invest billions of pounds in the 5G network. They have promised to spend £11bn.
Orange has also been pursuing growth in markets outside of Europe. Christel Heydemann, the company’s chief said its Middle East and African operations were a “core pillar” of her strategy.
The division posted an 11.1 per cent rise in revenues last year, in contrast with a 2.1 per cent decline in Europe.
Telecoms groups are hoping for a shift in policy in Brussels towards merger rules, after a report by former European Central Bank president Mario Draghi last year said the European Union should encourage more mergers in the sector.
“We claim to favour innovation, but we continue to add regulatory burdens on to European companies,” he said.
Following the report, European Commission president Ursula von der Leyen instructed Teresa Ribera, the commissioner in charge of the green transition and competition, to review horizontal merger guidelines.
Last month, Ribera told the FT: “The global reality has evolved, and we may need to think to what extent these things [regulations] that were there need to be updated.”
Connect Europe’s director general Alessandro Gropelli said he was “cautiously optimistic” that the EU would listen to calls for change and create a “better investment environment”.
Karen Egan, head of telecoms at Enders Analysis said: “EU regulators should also be looking with envy to the quality of networks and investment levels in more concentrated markets elsewhere.”
