A trend in cross-border investment in the telecoms sector continues to play out, with operators, financial institutions and governments all contributing to developments. We explore the motivations behind recent deals and the factors that will influence whether further transactions are on the horizon.
Cross-border and inter-operator deals have led to a complex web of interests and ownership structures in Europe. For example, three foreign operators (América Móvil, Bharti Airtel and Deutsche Telekom) now collectively own almost 40% of former UK incumbent BT.
Over the past 18 months, we have identified several transactions that have continued this trend, reshaping telecoms markets across the region. While some deals have seen existing shareholdings in operators increase, others have seen control change hands entirely.
We believe there remain four reasons behind the ongoing investments. A strategic decision or partnership is the most common, followed by establishing or expanding an international position. The transformation and growth of a target business and a financial opportunity in a potentially undervalued asset represent two further motivations.
Recent transactions have fuelled speculation about possible takeovers despite investors’ attempts to play this down. It is notable then that many years after liberalisation of the telecoms sector in Europe, some governments remain majority shareholders in their former incumbents.
The prospect of further foreign investment is likely to depend on competition and commercial factors. It will also be influenced by politics and regulation, particularly in respect of national security, although the thresholds for government review on such a basis differ across the region or may not exist at all.
Cross-border and inter-operator deals have led to a complex web of interests and ownership structures
A recent trend in cross-border and inter-operator investment in the telecoms sector continues to play out, reshaping the appearance of markets across Europe while changing ownership structures, including of former national incumbents. Some operators – whether directly or indirectly through an associated investment firm – have bought stakes in their peers, while standalone private equity (PE) companies, sovereign wealth funds and other financial institutions are also contributing to developments. For example:
In January 2024, in Spain, the CNMC approved at Phase 1 the €5bn (£4.2bn) acquisition of the assets and subsidiaries of Vodafone by investment firm Zegona;
In May 2024, the EC approved unconditionally the acquisition led by US-based PE firm KKR of NetCo (the primary and backbone fixed-line network business of former Italian incumbent TIM) and FiberCop (the joint venture between TIM and KKR comprising TIM's secondary fixed-line network);
Also in Italy, Poste Italiane has become TIM’s largest shareholder after it acquired 9.81% and 15% stakes in the operator from Cassa Depositi e Prestiti (CDP, the national development bank) and Vivendi, respectively;
In June 2024, Grupo Carso – the conglomerate of América Móvil owner Carlos Slim – acquired a 3.2% stake in BT. This later increased to 4.3%, which means that just under 40% of BT’s shares are now held by foreign operators;
Between September 2024 and February 2025, Iliad owner Xavier Niel (via investment holding company NJJ Boru and in turn through Carraun Telecom) raised his stake in Irish operator eir to more than70%;
In December 2024, Swisscom completed its €8bn (£6.6bn) all-cash takeover of Vodafone Italia, subject to commitments; and
In May 2025, Macquarie Asset Management (MAM) entered into an agreement – via a consortium – to purchase from domestic pension funds APT, PFA and PKA the 50% of Danish operator TDC that it currently does not own.
These deals have materialised despite heightened political sensitivity (amplified by cyberattacks) about ownership of strategic national assets, including digital infrastructure, and the application of new foreign investment rules. They have made the investment landscape more complex, with a clear cross-pollination of interests and web of linkages in ownership structures, of which Figure 1 seeks to provide a non-exhaustive illustration.
There are four main reasons behind the recent wave of investments
From analysing recent announcements of investments into telecoms operators, it is possible to categorise motivations according to the same four groups we previously identified – see Table 1 for examples. There is also a degree of nuance with these transactions that ought to be appreciated, for instance with TIM seeking to reduce its debt pile by monetising its fixed-line assets and Vodafone actively looking to exit the cut-throat Spanish market.
Long after the liberalisation of the telecoms sector in Europe, it is notable that governments are still significant shareholders in their former incumbents
Cross-border investments in telecoms have resulted in changes of leadership, strategy, focus and/or footprint. Naturally, they have also seen investing parties seek to exert influence over their target, with e& and STC taking a seat on the boards of Vodafone and Telefónica, respectively. These transactions have fuelled speculation about potential acquisitions, which would reflect previous deals in countries such as Malta (Monaco Telecom/Vodafone) and Poland (Iliad/Play). Bharti Global – the investment arm of Sunil Bharti Mittal’s Bharti Enterprises, which owns Indian operator Bharti Airtel – has been forced to reiterate that it does not plan to raise its stake in BT above the current level (potentially to the 30% mark at which point it would be required to make a takeover offer), although Mittal does appear to want to play an active shareholder role. e& has also played down speculation that it is interested in acquiring United Group, but admitted that it does continually review relevant market opportunities.
Amid the recent wave in investments from the private sector and the prospect of further deals, it is worth highlighting that several European governments (still) own a significant proportion of their former national incumbents post-liberalisation. As Figure 2 shows, (direct and indirect) holdings range from 10% to 100%. In Germany, the Government retains a 27.8% stake in Deutsche Telekom. The independent Monopolies Commission has argued that this results in a conflict of interest between the goal of creating fair competition and the state’s interest in the operator’s financial performance, urging the stake be sold in full to release funds for infrastructure investment.
The prospect of foreign investment depends on regulatory, political, competition and commercial factors
With more cross-border and inter-operator investments taking place, concerns have been raised over the potential impacts on both competition and consumers. In the EU, the Foreign Subsidies Regulation (FSR) aims to enable the EC to address distortions caused by foreign subsidies and to ensure a level playing field for all companies operating on the internal market. The first test of the FSR was e&’s acquisition of sole control of PPF Telecom, which the EC approved subject to conditions. With a specific focus on consumers, in March 2025, Australia amended the National Broadband Network Companies Act 2011 to ensure that the NBN Co remains in public ownership. According to the Government, this will “lock in” fast, reliable and affordable high-speed internet services for citizens, accusing the previous administration (led by the Liberal-National Coalition) of seeking to put the NBN Co “on the block for sale”, which it claims would have meant “selling out” regional communities.
However, the main issue sparked by the majority of transactions has been security. In 2013, the Dutch Government warned that the potential acquisition of KPN by América Móvil could have implications for national security, as well as for the emergency services and public bodies that relied on the operator’s network. In October 2020, the Undesirable Telecommunications Control Act came into effect, giving the Government the power to prohibit the acquisition or retention of a controlling interest in a “telecoms party” in the Netherlands if it could lead to a threat to the public interest. In Switzerland, the Government has decided to retain its slim majority stake in Swisscom, stating that this was necessary for national security purposes. As such concerns have intensified, policymakers in Europe have sought to ensure their control over strategically important assets. For example, Italy’s Ministry of Economy and Finance was part of the consortium that bought TIM’s NetCo, acquiring a 16% stake. Meanwhile, the Spanish Government – via state-owned industrial holding company Sociedad Estatal de Participaciones Industriales (SEPI) – has acquired a 10% stake in Telefónica in a bid to counter the influence of STC, which is 64% owned by Saudi Arabia's Public Investment Fund (PIF).
Against this tense geopolitical backdrop, some governments have moved to strengthen legal frameworks. In the UK, the National Security and Investment (NSI) Act mandates a review of any stake of 25% or more held by an overseas entity in a firm considered critical to national security. Under the act, the Government assessed – but ultimately cleared – Altice’s investment in BT seemingly on the basis that it would allow Altice to materially influence BT’s group-level policy. In turn, the UK Government also reviewed and approved the sale of Altice’s shareholding in BT to Bharti Global (the investment arm of Bharti Enterprises, which owns Indian operator Bharti Airtel), subject to certain commitments. As Figure 3 shows, transactions that increase an investor’s (typically a foreign investor’s) interest in a company above a certain level would trigger a security review. As such, the scope for future deals will likely hinge on regulation, with thresholds differing between European countries – including where they may not exist, such as in Portugal or Switzerland.
Whether or not this trend is likely to continue may also depend on commercial, political and antitrust factors. In France, there are reports that the Government favours for security reasons a potential sale of Altice-owned SFR to its rivals Bouygues, Free and Orange rather than to an operator backed by one of the Gulf States. Similarly, there are suggestions that Telefónica and MasOrange are considering a bid to divide up the assets of Vodafone in Spain. This would of course represent a domestic transaction and would likely encounter significant resistance from the EC on competition grounds.
However, this would still leave the future of indebted Altice Portugal in limbo. In August 2024, Altice owner Patrick Draghi sold his 24.5% stake in BT to Mittal’s Bharti Global. The previous month, Draghi ended talks over a sale of Altice Portugal to STC, which then reportedly turned its gaze towards Vodafone Portugal (which itself had seen a proposed acquisition of cableco Nowo blocked by the country’s competition authority). Following exits from Hungary, Italy and Spain, and a merger in the UK, Vodafone currently considers the ‘rightsizing’ of its European footprint complete. Ultimately, it would therefore be a strategic decision as to whether STC would see scope to secure a return from the telecoms market in Portugal, which has become increasingly price competitive as a result of new entrant Digi.
