European telecom groups tell regulators mergers are good

* Competition regulators in Brussels seen taking a harder line Danish merger deal abandoned last month due to opposition

By Julia Fioretti

BRUSSELS, Oct (HKSE: 3366-OL.HK - news) 13 (Reuters) - Regulators should take a more favourable view of consolidation in European telecoms markets, the CEOs of 10 European telecoms companies said on Tuesday, reflecting concerns that proposed deals still to be vetted in the UK and Italy might fall foul of the competition authorities.

The European Commission has taken a harder line on mergers between mobile network operators since EU Competition Commissioner Margrethe Vestager took office last year, scuppering a Danish deal between TeliaSonera (Amsterdam: 1087941.AS - news) and Telenor (Oslo: TELFUT.OL - news) last month.

The chief executives of 10 companies - Deutsche Telekom (Xetra: 555750 - news) , Orange (Taiwan OTC: 4554.TWO - news) , Telefonica (Amsterdam: TA6.AS - news) and Telecom Italia, KPN (Amsterdam: KPN.AS - news) , TeliaSonera, Telenor, Austria Telekom, Portugal Telecom and Belgian operator Proximus (EUREX: 1799561.EX - news) - urged regulators to consider investment, innovation, efficiency and quality of service when assessing mergers.

"Our sector is in need of building scale and markets need to function at optimal levels," the CEOs said in a statement ahead of a conference in Brussels. "We want to ensure more investment and higher value for money for customers."

The call comes as Brussels is set to open an in-depth investigation into Three UK mobile network owner Hutchison (HKSE: 0013-OL.HK - news) Whampoa's 10.3 billion-pound ($15.7 billion) deal to buy Telefonica's O2 UK and make the combine the country's biggest operator ahead of EE and Vodafone.

Meanwhile the UK competition regulator is vetting the $20 billion deal for national fixed line network operator BT to acquire EE from Orange and Deutsche Telekom.

Telecoms companies have been on a buying spree over the past three years, with Vestager's predecessor in Brussels waving through similar "four-to-three" consolidation deals in Austria, Germany and Ireland (Other OTC: IRLD - news) after concessions were made which were seen as conducive to fostering sufficient competition, particularly from so-called mobile virtual network operators (MVNOs).

But in the Danish case Vestager said she had concluded there needed to be a fourth actual network operator in that market to maintain sufficient competition.

"I have no pros or cons when it comes to consolidation, I'm just very much pro-competition because this is my job, this is what I do," Vestager told Reuters ast week.

A deal to join Hutchison and Vimpelcom (NasdaqGS: VIP - news) 's Italian subsidiaries to cut the number of mobile network operators there to three from four is expected to land on her desk next year.

The CEOs also called for lighter rules on giving network access to market competitors, saying prices should only be regulated as an exception, in a plea to EU Commissioner Guenther Oettinger who is currently reviewing the EU's telecoms rules.

"Commercial terms for network access should be the rule ... only in such a context can we deliver faster coverage for all Europeans," they said. ($1 = 0.6557 pounds) (Additional reporting by Foo Yun Chee; Editing by Greg Mahlich)