European mobile markets and the doctrine of “4 networks good, 3 networks bad”

In light of the recent European Commission decisions that clearly favour the maintenance of a four-network structure in European mobile markets, the purpose is to provide an empirical examination of the case for and against such a structure.

A table of concentration ratios in 35 sample European markets is constructed and is followed by a detailed analysis of all relevant merger/takeover cases since 2012. These are then used to provide a general analysis of the desirability of further consolidation in the European mobile sector.

Although the relevant investigatory bodies claim to have made out a watertight case for the maintenance of existing structures, the paper explains why these claims should be met with some scepticism, especially in light of the development of “quad-play” in all markets.

When a decision is made on a market structure, it is pointless to pursue the “but what if?” alternatives any further. However, it should be possible in a few years’ time to assess whether the Commission’s predictions have come to pass.

As the UK decision has only just been delivered, the only commentary so far has had a narrow focus, whereas this paper seeks to provide useful and relevant background data about the structure of markets and technological developments.