(Bloomberg) -- Big telecoms mergers in Europe would cut competition and distort the bloc’s prized single market, the European Union’s competition chief Margrethe Vestager warned, in an apparent rebuttal of calls in a new EU report for more consolidation. 

“No evidence suggests that more concentrated national markets lead to better outcomes,” the EU’s Vestager said at a conference in Brussels on Thursday. “To the contrary, it would lead to less competitive national markets and to a more fragmented single market.”

Vestager’s comments come after a recent report from former Italian Prime Minister Enrico Letta to EU leaders, which recommended consolidation for telecoms operators as a way to improve the bloc’s mobile and fixed networks. Letta’s findings were seen as a boost for operators that have argued for years that the sector is ripe for mergers, but Vestager’s stance put her at odds with those views. 

Read More: EU Report Backs Telecom Consolidation, Strong Energy Market 

The Letta report earlier this week — as well as comments from former Italian Prime Minister Mario Draghi emphasizing the need for telecom operators to achieve scale — has given some hope to operators that the EU’s executive arm could change its attitude toward mergers when a new cohort of commissioners takes over in the coming months.

Still, this would require a major turnaround from the EU’s antitrust arm, currently led by Vestager.

While regulators insist there is no magic number of firms in national phone markets, deals cutting competition to three companies in a country have come under more scrutiny. That situation has frustrated companies seeking to scale-up operations across the 27-nation EU and recoup massive investments in infrastructure and wireless spectrum.

Telecom companies have been lobbying for years to back so-called in-market mergers. Europe’s four largest operators took to the stage at Mobile World Congress this year to argue that consolidation is key to funding the expensive network upgrades that policymakers want to achieve 5G and fiber targets on the continent. 

(Updates with additional context starting in 4th paragraph)

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