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As borrowing costs rise, JPM sees European telecoms consolidation accelerating

By Reuters News09:39 (UTC), 26 October 2026 Updated

** JPMorgan says higher borrowing costs are putting pressure on heavily indebted European telecom operators, increasing the likelihood of consolidation and further restructurings

** JPM says some smaller telecom operators are struggling to cope with higher interest costs after years of cheap financing, following a period of weaker competition and the 2025 default of French telecom operator SFR

** It downgrades Telefonica TEF.MC to "underweight" from "neutral" saying investors may be underestimating balance-sheet risks

** The broker also points to debt risks at Virgin Media O2, rising financing costs and the possibility it may need to raise capital to fund consolidation

** The broker sees BT BT.L as a beneficiary, adding that financial stress among rivals and BT's planned acquisition of TalkTalk assets should strengthen its position in the UK market

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