After years of lethargy, the M&A wheel is starting to turn in the European telecoms sector. It was set in motion by Vodafone, which completed three billion-euro deals in one stroke: first the sale of its subsidiary in Spain, then in Italy and finally the alliance with its competitor Three UK in its home market. In all three cases, what was previously almost impossible in Europe was achieved: a consolidation of providers within one country, which allows the capital-intensive industry to realise considerable synergies when one of two redundant mobile networks is shut down. The reason for this is that in many markets with three or even more network operators and other service providers without a network, who in turn are once again increasing their prices, the companies affected by a tough price war with pressure on revenues and cash flows are not in a position to earn back the investment costs for the expensive infrastructure.

Until recently, the anti-trust authorities turned a deaf ear to these complaints, but now both the EU and the UK seem to be rethinking their position. Following the deal between Vodafone and Three UK, BT Group is apparently keen to seize the opportunity to pick up its faltering competitor TalkTalk before someone else does and customers end up on their network.

Despite all the optimism in the industry, however, the recent past in this country has taught us that some brilliant M&A transactions quickly fade in the turmoil of integration and competitive constraints. Not only because not all synergies that are identified can be realised, but also because the glory sometimes doesn't last long. For example, the merger of Telefónica Deutschland and E-plus, which was achieved through a tough struggle, only brought brief relief to both partners. The increased price level soon enticed a newcomer to enter the market. Since then, the old adage applies once again: the competition never sleeps.