Here’s a fact that surprises people outside the industry: the technology letting your phone work the same way in Sofia, Stockholm, and Seville exists because European companies agreed, decades ago, to cooperate on a single standard instead of competing on incompatible ones. GSM — the foundation of everything mobile that followed — wasn’t a national triumph. It was a continental one. And it’s precisely because that story is true that the current state of European telecom is such a genuine paradox worth sitting with, not just another “Europe is falling behind” complaint.
The numbers behind the complaint
Mario Draghi’s September 2024 report on European competitiveness put a specific figure on something the industry had discussed informally for years: there are 34 mobile network operator groups across the EU, compared with a handful in the US or China. India, similarly, has consolidated to essentially four major players. Europe, despite having a comparable population and economy to the US, operates with roughly ten times the number of mobile groups.
Draghi’s diagnosis is direct: this fragmentation makes the fixed costs of network investment — 5G, fiber, eventually 6G — relatively far more burdensome for each individual EU operator than for continent-scale rivals in the US or China, who can spread the same capital cost over a much larger subscriber base. His prescription follows from the diagnosis: encourage cross-border and intra-national mergers, shift EU competition policy from proactive “ex ante” market intervention (which has historically favored many small players and low consumer prices) toward reactive “ex post” enforcement, and redefine telecom markets at the EU level instead of the national level.
This is not a fringe view. The Letta report, published around the same time, reaches a similar conclusion, arguing the EU “needs to let network operators expand by buying national rivals to help build a real single market.” Connect Europe’s 2026 State of Digital Communications report calls this year “crunch time” for European telecoms, pointing again to continued underinvestment and fragmentation as unresolved structural problems.
The counter-argument, taken seriously
It would be intellectually lazy to present consolidation as an uncontested consensus, because it isn’t. A pointed CEPR critique of the Draghi report argues that its telecom recommendations are, in their words, “misguided and dangerous” — that redefining the market as EU-wide is a legal fiction while telecom markets remain overwhelmingly national in practice (different spectrum allocations, different infrastructure, different regulators), and that merger “commitments to invest” are historically unreliable remedies compared to the actual, structural alternative of requiring real network access or asset transfers.
There’s also a simple empirical problem for the pro-consolidation camp: more than a year after the Draghi report’s publication, essentially no major cross-border telecom mergers have been announced in Europe. The European Competition Commissioner has faced increasing pressure from the Financial Times and Wall Street Journal to accelerate a review of merger guidelines, but as of today, the policy shift Draghi called for remains mostly aspirational. Consolidation is being discussed as a solution to European telecom’s structural problem more than it’s actually happening.
The graveyard of European telecom equipment makers
Here’s where the paradox sharpens into something almost painful, and it’s the part of this story I don’t think gets told often enough. Telecom equipment — the actual physical and software infrastructure that makes networks work — was a European-dominated industry for decades. Ericsson (Sweden), Nokia (Finland), Alcatel (France), and Siemens (Germany) were, at various points, genuine global leaders, not regional players.
Almost none of that industrial base survived intact. Siemens exited telecom equipment entirely in 2013, when Nokia bought out its stake in their joint venture, Nokia Siemens Networks — a venture that had already cut roughly 17,000 jobs by 2013 as part of Nokia’s own restructuring push. Alcatel, already merged with America’s Lucent in 2006, was itself acquired by Nokia in a deal valued at €15.6 billion, finalized in early 2016. The acquisition brought its own separate wave of cuts: Nokia announced eliminating 10,000 to 15,000 positions, roughly 14% of the combined 104,000-person workforce, to capture the merger’s promised cost synergies. Names like Marconi (UK), Nortel (Canada, though not European, a direct casualty of the same market dynamics), and Motorola’s wireless infrastructure arm all disappeared from the market entirely over the same two decades. By the mid-2020s, the entire global telecom equipment market had consolidated to roughly eight suppliers controlling about 80% of worldwide revenue — and of the historically dominant European names, only two, Ericsson and Nokia, remain as independent companies. Both had to fight for survival through the exact consolidation logic now being debated at the operator level.
The result of that survival fight: Huawei passed Nokia to become the world’s largest telecom equipment supplier by revenue in 2024, with Nokia and Ericsson holding the number two and three positions globally, and a considerably stronger position specifically in markets outside China. The industry Europe effectively invented through the GSM standardization effort is now led, by revenue, by a Chinese company — with the two remaining European survivors holding on through scale achieved by consuming their own former domestic rivals.
What actually happens after consolidation
This is where the abstract policy debate connects to something I’ve written about directly, from Bulgaria’s own experience. When Vivacom acquired Bulsatcom in 2024, the deal was cleared through the standard regulatory process — market share, subscriber concentration, competitive effects on paper. What the regulatory process didn’t track, and still hasn’t published, is what happened to the more than a thousand Bulsatcom employees whose jobs were at the center of the protests before the deal closed, or how many former Bulsatcom customers actually stayed with Vivacom afterward. The pay-TV segment — the most consolidated part of the Bulgarian telecom market — recorded its first revenue decline in a decade in the most recent regulatory report.
Liberty Global’s recent buyout of Vodafone’s remaining stake in their Dutch joint venture, VodafoneZiggo, is a far larger version of the same structural pattern: regulatory clearance measured in market share and competitive effects, with no institutional mechanism anywhere in the process for tracking what happens to the people and prices on the other side of the transaction, a year or two out.
If the Draghi consolidation agenda actually accelerates — and eventually, given the investment math, it probably has to — this is the exact question Europe will need an answer for at much larger scale than a single Bulgarian pay-TV segment. Scale and investment capacity are real, legitimate problems. But “we approved the merger” and “we know what happened to the workforce and the prices afterward” are two entirely different institutional commitments, and only the first one currently exists anywhere in EU telecom regulation.
The uncomfortable, honest synthesis
I don’t think the fragmentation-versus-scale tension in European telecom is really a technology story at all — it’s the same tension that defines Europe more broadly, for better and worse. The instinct toward national regulatory control, toward protecting many smaller players instead of blessing a few continental champions, toward valuing consumer price protection over aggregate investment capacity, is the same instinct that gives Europe a lot of what makes it a genuinely good place to live: strong worker protections, real national identity and cultural continuity inside a shared economic project, and a degree of suspicion toward unchecked corporate scale that, frankly, other regions could stand to have more of.
But GSM proves this fragmentation isn’t inevitable or purely cultural — Europe unified decisively when the incentives to cooperate were clear enough and the political will existed. What’s happened since, across telecom equipment and now telecom operators, is less a story about Europe being constitutionally incapable of scale, and more a story about which kinds of unification Europe has been willing to pursue and which it hasn’t. Europe chose to unify a technical standard in the 1980s. It has not yet chosen, more than a year after being told clearly why it matters, to unify a market.
Whether that changes, and whether it changes in a way that actually accounts for what happens to workers and prices afterward rather than just balance sheets, is the real test — not whether Europe can theoretically compete with three or four American or Chinese telecom giants, but whether it decides to on terms it can still recognize as its own.