Efficient operator scale in European mobile markets

European mobile markets are undergoing a structural shift: rising data usage, declining revenue per user, saturating subscriber penetration and sustained investment requirements have made operator scale increasingly important. Europe remains the least concentrated major mobile region in the world, with operators being structurally subscale compared to global peers. This gap has widened during precisely the period when scale matters most. Markets with greater scale invest more, build better networks and do not charge higher prices: compared to four-player markets, three-player markets invest around 48% more per connection, deliver faster speeds and achieve greater 5G coverage, with no evidence of price differences. 

Empirical analysis confirms an inverted-U relationship between concentration and investment, with both investment and network quality maximised at Herfindahl-Hirschman Index levels of approximately 3,100–4,000 – well above the European average today. Difference-in-differences evidence further confirms the asymmetry, as consolidation events are associated with capex increases of 28–38% and network speed improvements of around 25%, while entry events show null or negative effects on investment and quality. Competition policy should therefore assess mergers across the full range of consumer welfare dimensions – investment, quality, coverage and prices – rather than focusing narrowly on operator count or short-term price effects.