European operators struck a notably more optimistic tone on regulation and consolidation in Q1 2026, with several executives welcoming the EC’s draft merger guidelines as a potential turning point for the sector
Orange: The revised bid for SFR dominated potentially premature discussions
Christel Heydemann (CEO, Orange) stated that Orange’s new strategic plan, “Trust the future”, was off to a good start, reporting strong revenue and EBITDAaL growth at the group level. However, Orange’s joint bid with Bouygues Telecom and Iliad for SFR in France was once again (as it was in Q3 2025) the main talking point during this quarter’s earnings call. According to Heydemann, the transaction is not only important for operators in France, but for the wider European telecoms sector as it looks at ways to sustain much-needed investment in critical infrastructure. With several questions from analysts on the potential merger review process and timeline, Heydemann anticipated that there would be three “files” (presumably notifications), one for each member of the consortium of acquiring parties. If the terms of a deal are agreed, Bouygues would notify the French competition authority (Autorité de la concurrence) while Iliad would notify the EC, with Orange’s notification depending on the timing of the closure of the full acquisition of MasOrange in Spain. Heydemann added that she expected one authority to take the lead in assessing any proposed transaction and that even if this was the Autorité, the EC would likely be a keen collaborator given the scale and possible implications of the deal. Acknowledging that much of the discussion may be premature, she indicated that Orange was priming said bodies to help them get up to speed quickly. On the review of the EU merger guidelines, Heydemann stated that she had seen the leaked (now published) draft, which she considers goes in the right direction, reflecting some of the asks that the operator has been vocal on in recent years. However, she understood that DG COMP, even with a new Director General, would never completely walk away from the impact on consumer prices as a likely indicator of the merits of a merger – something Heydemann considered would be difficult for any political leader to do in the current economic climate.
Liberty Global: Full of praise for the EC’s draft merger guidelines
Regulatory and competition issues arguably took centre stage during Liberty’s Q1 2026 results presentation. Talking first to the UK market where the operator is part of a consortium seeking to merge its nexfibre business with Netomnia, Mike Fries (Chairman and Chief Executive Officer, Liberty Global) remarked that while noise from competitors has escalated (i.e. CityFibre calling for the deal to be blocked), he still thinks it will be approved. While the UK’s Competition and Markets Authority (CMA) has remained tight-lipped about how it will approach the transaction, in Europe, DG COMP has released its much-anticipated draft merger guidelines. Fries considers the draft “quite positive” at least in comparison to what the EC has been posturing previously on its stance towards in-market consolidation in mobile. He praised the EC for listening to the arguments that he (and others) had been making and for seeing the benefits rather than just negatives of deals, as well as for recognising that scale can support both investment and innovation. When questioned on why he was being so optimistic (relative at least to other European operators), Fries pointed to the fact these are things spelled out in a document, and put in writing for the first time, rather than alluded to during a speech – “Never before have they written down in black and white the sort of statements we’re reading today”. The significance he placed on the revised, but still currently draft, guidelines was stark, and the praise for the EC real, in what he sees as “the first step to repair in the European telecoms space”.
Vodafone Group: Portfolio transformation has led to a leaner but stronger outfit
Having rightsized its European footprint over the past three years, Margherita Della Valle (CEO, Vodafone Group) stated that she was now leading a simpler and stronger business, one that is entering a new chapter and well-positioned for growth. Seeing a more supportive environment for connectivity across the region, including in terms of regulation and spectrum policy, she stressed that Vodafone is operating from scaled positions, focusing its resources on markets with sustainable structures and pricing models. On M&A, Della Valle confirmed that it was always in the plan to buy out Hutchison’s share of VodafoneThree in the UK, even if the decision to do so has come earlier than expected. She did not rule out Vodafone being involved in further deals, but stated that the choice to engage in consolidation always involves “puts and takes”. While the UK buy-out temporarily raises leverage above the operator’s ideal range, Della Valle stated that it will go back down, including as a result of proceeds from the planned sale of its 50% share in VodafoneZiggo in the Netherlands. In response to a question on the EC’s draft merger guidelines, she stated that her first read was positive in light of the increased weight given to factors other than price, such as investment, innovation and resilience. While welcoming the recognition that the assessment period for telecoms mergers should be longer because the benefits take longer to materialise, Della Valle urged the EC to be specific, following the lead of the Competition and Markets Authority (CMA) that took eight years as the appropriate timeline to adopt when reviewing the Three/Vodafone deal. Similarly, she considered the EC should reflect the CMA’s acceptance of “sophisticated” behavioural commitments, rather than persisting with a narrow focus on the relatively blunt instrument that is structural remedies.
Deutsche Telekom: As AI dominates the operator’s plans, any revivals of the ‘fair share’ debate look unlikely
Tim Höttges (CEO, Deutsche Telekom) wasted no time in emphasising Deutsche Telekom’s primary focus on implementing AI, calling it his “number one priority”. Amid talk of relatively positive and steady financial results, Höttges cautioned the analyst audience that any questions speculating over potential market transactions would go unanswered – a promise he kept throughout the results call, even admitting that he is not ordinarily known for being careful about what he’s saying in situations like this. Höttges and Christian Illek (CFO, Deutsche Telekom) welcomed the German Government’s proposed amendments to its Telecommunications Act (TKG), with the former stating that it is “fundamentally positive” and a good example of regulation supporting investment, rather than slowing it down. Illek also detailed the firm’s efforts to secure further amendments that would reduce the time needed to gain planning permissions for certain fibre deployments. Elsewhere, questions targeted Deutsche Telekom’s investments into sovereign cloud services and AI, and its partnership with SpaceX’s Starlink to offer satellite services, which Höttges was particularly pleased about, praising Elon Musk (CEO, SpaceX), who he admires “in every regard”. On whether the operator could seek new revenue from big tech hyperscalers in exchange for the significant connectivity needs of AI, Höttges warned that he “would be careful” about the revival of any fair share ideas.
Telefónica: A promising start to the year, while remaining coy on potential future consolidation
Emilio Gayo (COO, Telefónica) reported a strong start to the year for Telefónica, driven primarily by its “Transform and Grow” plan. Juan Azcue (CFO, Telefónica) confirmed that the group is on track to meet its free cash flow guidance of around €3bn (£2.6bn) this quarter. Santiago Argelich (CEO, Telefónica Deutschland) highlighted a “rational market” in Spain, noting that despite price increases this quarter, Telefónica had reached its “lowest churn ever”. Several analyst questions focused on the prospect of potential M&A opportunities for the group, to which Argelich remarked that “we don’t comment on specific transactions or rumours”. However, he did state that the group would consider opportunities that align with its M&A criteria, citing the nexfibre/Netomnia deal in the UK as an example. Azcue was similarly tight-lipped on potential consolidation (with 1&1) in Germany, although he did say that he was happy with the evolution of the network in the country. On the topic of the consortium Telefónica is leading to build an AI Gigafactory in Spain, Borja Ochoa (CEO, Telefónica España) announced that an offer would be presented in June or July 2026, with an outcome expected by the end of the year. Ochoa indicated that any potential capital returns from this investment would be limited, suggesting they would be “definitely below” the €100m (£86m) speculated by one participant.
BT Group: A focus on Openreach’s performance and standing following the conclusion of the regulator’s fibre market review
After the conclusion of Ofcom’s Telecoms Access Review (TAR) in March this year, there was predictably less of a focus on the regulatory environment. We heard of the “ongoing dialogue” with Ofcom over the competitive nature of the broadband market and how much of it can be defined as sustainable – something which would then trigger deregulation for Openreach. When asked whether further wholesale discount schemes were in the pipeline, we were reminded that any new discount offers (known as Equinox in the past) would be taken to Ofcom before being launched. Overall, Openreach was singled out as having “executed brilliantly” as it continues Europe’s fastest fibre build. Alison Kirby (CEO, BT Group) praised Simon Lowth (CFO, BT Group) for having helped create “the largest wholly-owned fibre asset in Europe”, with no off-balance sheet or funding complexity. Finally, it was “not for BT to comment” on whether the proposed merger between nexfibre and Netomnia should be approved, with Kirby reiterating that it was still cheaper for Openreach to build rather than buy – often as much as half of the cost at which some altnets have been building.
