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Expect more telco M&A ahead in Europe, MS says



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** After an action packed year so far in European telcos M&A space, Morgan Stanley says there's likely still more to come

** "Whilst our upbeat view on the sector is based on fundamentals, we continue to think M&A could skew the sector's risk reward upward," MS says in a July 3 note

** The broker points out that the formation of the new European Commission, on which it expects full clarity before December, is a major catalyst for the sector

** "We believe the industry will be watching for any changes in antitrust approach under the next commission" - MS

** It notes that more than two-thirds of European markets have four players, leaving significant scope for consolidation

** Italy still has the highest consolidation potential, MS says, adding the recently announced Swisscom/Vodafone deal brings fixed/mobile concentration, but leaves the door open for further action on mobile

** MS also sees scope for further improvement with fibre deals core to this as the overbuild struggles to deliver on fill rates




Reporting by Anna Pruchnicka

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