Telecoms Face Crackdowns in Sweden While US Cranks Up Heat
RingPlus News Service Los Angeles, April 26th, 2017 - Multiple telecoms in Sweden were raided yesterday by EU and Swedish antitrust officials on suspicion that the companies worked together to keep other companies out of the market, a move that is considered anticompetitive behavior. On the other side of the Atlantic Ocean, telecoms are ramping up their plans to bid, merge, and acquire each other and media companies at an accelerating pace.
Previously, we outlined the pros and cons of mergers and acquisitions between media-telecoms and telecom-telecom companies. On the sunny side, we could experience a new era of innovation in product offerings with stronger, faster networks over which to enjoy those products. On the dark side, consumers could be charged exorbitant sums of money for services from a limited number of carriers (and in some cases, only a single carrier) or the online experience could be altered overall as Net Neutrality rules wane, moving closer and closer to their death.
While the raid in Sweden impacted telecoms that perhaps attempted to prevent competition from entering the market, US telecoms’ market trend of mergers and acquisitions is, in its own way, equally alarming. These mega companies are so robust, they’re essentially immune to small, new competition entering the market. Building a cable or telecom infrastructure does not come at a low cost, and those who may be able to foot the bill for such a massive project won’t see enough of a return for it to be worthwhile, as stated by Kate Cox, a writer for Consumerist. The giants that we know today became so slowly over time: a plethora of small local companies existed, until they began to merge, creating a much greater network under a single company. The Wall Street Journal’s illustration of history in the industry shows how 20 years whittled down 40 regional cable companies to today’s Comcast, Time Warner Cable, Cox, and Charter.
The market is powering up for strong merger season after T-Mobile CEO John Legere hinted at several companies’ decision to seek strategic deals, including his own T-Mobile potentially seeking a deal with Dish Network Corp, Sprint Corp, and/or Comcast Corp. Expiring anti-collusion rules associated with the auction will expire and the FCC’s nod toward deregulation under the Trump administration creates a perfect environment for the M&A trend to take hold. Rumors of other deals in the works, such as Verizon’s eyeing of media giants Walt Disney or CBS, are further pushing corporations to reevaluate their alliances and spark new, more innovative partnerships through mergers.