The great dilemma of Spanish telecoms: either they become giants or China swallows them up

The European telecommunications sector is facing a strategic shift, with consolidation becoming a necessity rather than a regulatory taboo. Orange's recent confirmation of its ability to simultaneously acquire a 50% stake in Masorange and assets from Altice in France signals this trend. This move, while significant, is viewed positively by the market, a stark contrast to the reaction just five years ago. The financial director of Orange, Laurent Martínez, has stated that these acquisitions are feasible while maintaining shareholder returns as a top priority. Orange's strategy in France focuses on gaining customers and spectrum, not redundant infrastructure, highlighting the efficiency gains driving these consolidations. Meanwhile, in Spain, the Masorange shareholder agreement currently restricts any major moves until April 2026. This shift has broader implications for Europe's digital sovereignty, as the continent's fragmented telecom market struggles to compete globally. Europe has a significantly higher number of major operators compared to the US and China, leading to compressed margins and insufficient investment. This dynamic has resulted in a 41% decline in the sector's market capitalization between 2015 and 2023, underscoring the urgency for change. The European Union appears to be shifting its stance on mergers after years of anti-trust regulations, potentially signaling a strategic pivot to strengthen its telecom sector. This change in approach is critical for the long-term competitiveness of European telecom companies.