The deals are also testing European regulators' newfound openness to consolidation even at the risk of higher prices for consumers. European Commission President Jean-Claude Juncker and German Chancellor Angela Merkel have called for lighter regulation to encourage telecoms firms to step up investments in faster networks and help revive the region's stagnant economy.

Hutchison's move on Friday to buy Telefonica's UK O2 unit for 10.25 billion pounds to create Britain's biggest mobile market player came only hours after Portugal Telecom SGPS's shareholders cleared the sale to Altice of PT Portugal, the national telecoms operator, for 7.4 billion euros.

Bankers predict that both groups will go on to lead the next phase of industry consolidation in Europe, with Hutchison aiming next for Vimpelcom's Wind in Italy and some Nordic businesses. Franco-Israeli billionaire Patrick Drahi's Altice will push French subsidiary Numericable SFR towards acquiring smaller rival Bouygues Telecom.

"There is a window of opportunity for more deals because of the lenient credit environment and more favourable stance of European Union regulators towards consolidation as they try to spark network investments and growth," said one sector banker.

A person close to the Hutchison deal, said: "The floodgates have opened on European consolidation."

The arrival of Hutchison and Altice in the big league in Europe after long being unprofitable small players is a major shift. Meanwhile former state-owned monopolies like Telefonica and France's Orange have been selling assets to cut debt and focus on fewer countries.

Thirteen M&A transactions have taken place involving Europe's telecoms and cable companies since January 2013, as companies seek scale to combat falling prices.

Also fuelling the deals has been the so-called "convergence" trend whereby operators look to sell consumers bundles of fixed and mobile telephony, broadband and television services.

Exploding data traffic also means operators need combinations of fixed and mobile networks, a shift exemplified by Vodafone's acquisitions of big cable groups in Spain and Germany in the last two years.

CLEARING REGULATORY HURDLES

In agreeing to buy O2 in the UK, Hutchison felt "reasonably optimistic" that European competition authorities would clear the acquisition, the person close to the deal said.

Hutchison knows the regulatory drill well having already completed acquisitions in Austria and Ireland, which similarly cut the number of mobile network operators to three from four, after agreeing to concessions such as renting out network capacity to smaller rivals.

Meanwile Telefonica Deutschland last year after a lengthy competition review was allowed to buy smaller rival E-Plus from Dutch group KPN as long as it dedicated 20 percent of network capacity to a credible reseller. It duly signed with Drillisch, a small virtual operator.

Jefferies analyst Jerry Dellis said a similar remedy for competition concerns in the UK could have more impact.

"There is a longer list of more powerful telco and media brands that could be willing to make use of a similar opportunity, including TalkTalk, Virgin, Sky, and Tesco Mobile," he said in a note.

It also remains to be seen how the British market will be affected by fixed line broadband leader BT Group's pending 12.5 billion-pound acquisition of EE, the UK's biggest mobile network operator, from Orange and Deutsche Telekom.

Analysts and bankers predict that pay-TV operator Sky could look to signing a partnership with a mobile operator but few expect it to splash out on buying a mobile network company.

Another question mark is how Vodafone, now set to be pushed into third and last place in its home market and without a robust domestic broadband network, will respond.

It has been weighing its options, according to various sources familiar with the matter, including the big-bang move of buying Europe's biggest cable company, Liberty Global.

Stephane Richard, the chief executive of Orange, predicts no let-up to the industry's deal-making.

"It is crazy that there are over 100 fixed and mobile operators in Europe," he told Reuters in an interview in Davos.

"This is why we are lagging behind in broadband and 4G (mobile broadband) compared to the U.S., South Korea and Japan, which have a much smaller number of players."

(Additional reporting by Anjuli Davies in London and Sophie Sassard in Davos; Editing by Greg Mahlich)

By Leila Abboud