UAE gets its hands on eastern European telecom networks

Brussels – Telephone, Internet, and cable TV: the European Union deprives itself of part of its telecommunications market by selling it to the United Arab Emirates. The European Commission approved the acquisition of PPF Telecom Group BV (PPF) by Emirates Telecommunications Group Company PJSC (e&), giving the Emirati entity full control of a group operating in Bulgaria, Slovakia, Hungary, Serbia, and the Czech Republic. The green light is subject to conditions and excludes the Czech market from the non-European company’s future operations.

Overall, PPF serves over 10 million telecommunications customers. Non-European operators will be responsible for the network security of European users. The EU does not prevent doing business considering the free market and free movement of goods and services. However, the choice removes critical infrastructure from EU management and control. Margrethe Vestager, the commissioner in charge of Competition, limits herself to considerations related to her portfolio, welcoming a merger proposal that went smoothly because of market rules. 

In the background, however, remains a Europe that sells its telecommunications infrastructure and services to foreign operators. An exemplary case is Italy, with the Telecom- KKR case. In the European debate, the spotlight has been on Chinese penetration of the EU market, with explicit demands to prevent critical infrastructure like telecommunications networks from falling into Beijing’s hands. However, the Europe of states is proceeding in the opposite direction of strategic autonomy and sovereignty of its own.

The conditions set by the EU Antitrust Authority include that it must inform the Commission of any future acquisition that e& is planning to conduct, prohibition of any financing from the Emirates and e& to PPF’s activities in the EU internal market, and a commitment that e&’s articles of association do not deviate from ordinary UAE bankruptcy law, thereby removing the unlimited State guarantee. These guarantees are in place for 10 years, subject to renegotiation. Meanwhile, the EU deprives itself of part of its network, placing it in the hands of third countries.