GSMA: Europe’s Mobile Markets Are the Least Concentrated

European mobile operators have long been pressing competition regulators to look more favourably on consolidation, like the recent merger in the UK between Vodafone and Three.

A new report by GSMA Intelligence provides them with plenty of useful ammunition.

It states that on average European mobile markets are the least consolidated globally, as measured by the Herfindahl-Hirschman Index (HHI) or by C2 (the combined share of the two largest operators). Because of this, GSMA, states that “European operators are structurally sub-scale compared with leading mobile connectivity markets. 

“Consistent with this, Europe is also the only major region where in-market concentration has not increased accordingly during the mobile data era, which is the period when scale matters most.”

It goes on to say that this is adding to a widening gap with ‘5G leaders’ in other regions. 

The global picture

When looking globally from the end of 2017 onwards, there has been a net drop in the number of mobile operators in 35 countries, while this has risen in 23 countries. 

This story is more dramatic when viewed on a connection basis, with about 2.9 billion connections being present in consolidating markets, while just 0.55 billion were in ones where the number of mobile operators rose. 

However, Europe has typically bucked this trend, as some mergers were prevented. In addition, when they did go through, structural remedies “in some cases diluted the potential scale-driven efficiency benefits that initially motivated the transaction”. 

The power of three

The report also says that since 2016, European operators in three-player markets have invested nearly 50% more per connection than those in four-player ones. 

This investment translates into a better mobile experience: around 15% faster download and upload speeds, along with more 5G coverage and greater 5G adoption. 

This is despite “prices in more concentrated markets remaining broadly in line with those in less concentrated ones”.

The report’s authors state that a three-player structure is where investment incentives are strongest, with network speeds following a similar pattern.

According to their study of consolidation and new entrant events, going all the way back to 2010, when the number of mobile operators in a market drops, operator capex per connection goes up by around 33 to 45%. 

In addition, such moves, once network integration has happened and any concurrent investments have been deployed, lead to faster network speeds.

The story is largely the reverse when new entrants come in, including “smaller and less consistent price reductions than those observed after consolidation”. 

5G SA needs deep pockets

The report argues that the high amount of investment required to switch to 5G standalone access (SA) core networks and roll out dense 5G networks, combined with the relatively slow uplift operators have seen from the 4G to 5G transition, makes return on 5G investment very sensitive to the size of operators’ subscriber bases.

When the GSMA analysed data from 15 European operator groups, representing more than two-thirds of the region’s mobile market revenue, it found that about half “struggled to maintain return on capital employed above their weighted average cost of capital”.      

It goes on to note that as of Q4 2025, no European market included in the 5G Connectivity Index had reached 5G SA adoption of over 10%, while China leads globally with 81%, followed by India with 52%, Singapore with 41% and the US with 32%.

Advice for policy-makers 

"A more modern understanding of effective competition in a capital-intensive infrastructure market is long overdue," says Joakim Reiter, Chief External & Corporate Affairs Officer at Vodafone Group, in a blog about the report.

"Competition in mobile is increasingly driven by network quality, coverage, reliability and capability, not only by short-term price movements. A merger assessment that looks mainly at operator count misses the dynamic effects that matter most to consumers and businesses over time."

The report concludes by saying: “Policy should therefore focus less on operator count and more on whether operators can achieve efficient scale. Markets with fewer, well-capitalised operators consistently deliver higher investment per connection and better network outcomes than markets with a larger number of sub-scale operators. 

“Maximising the number of competitors as an objective without considering dynamic factors that drive longer-term consumer welfare risks undermining long-term quality, coverage and affordability goals. 

The report’s conclusion recommends that European regulators look beyond price considerations when mulling over mobile market M&A. 

“This has direct implications for horizontal merger assessments. Competition policy in mobile markets must explicitly recognise dynamic competition effects – that is, how mergers affect investment incentives, financial sustainability and competition on network quality over time," it states. 

“Static, price-centred analysis is inadequately suited to capital-intensive sectors. The evidence in Europe shows that when dynamic effects are properly considered, consolidation can strengthen effective competition and improve consumer welfare in the mobile data and 5G era.”