EU chief talks tough on consolidation

EU chief talks tough on consolidation

13 OCT 2015

Margrethe Vestager, the EU competition chief, returned to the contentious subject of mobile operator consolidation, in light of the recent failed merger in Denmark.

Her comments to the CEPS Corporate breakfast follow a major speech earlier this month on consolidation in Europe’s mobile industry.

The proposed merger in Denmark between TeliaSonera and Telenor followed a number of deals – in Austria, Ireland and Germany – that were approved by the European Commission.

TelaSonera and Telenor decided to abandon the merger on 11 September. But the commission was going to block the deal anyway, said Vestager (pictured), because the remedies offered by the two operators were insufficient.

The merger would have created the largest operator in Denmark and would have concentrated market power, according to Vestager. The country’s two largest operators – the merged entity and incumbent TDC – would together have held 80 per cent of the market.

A third, smaller player, Hi3G (3 Denmark), would have held 20 per cent.

Vestager argued the merger would have had anti-competitive effects for all type of customers, from private and business users to wholesale customers.

“And while the companies claimed that the merger would lead to greater investments, our investigation did not show how these investments would materialise,” she said.

Even if the investments did materialise, the commission could not see how the benefits for users would outweigh the expected price increases induced by the loss of competition, the regulator added.

However, she emphasised the commission follows a case-by-case approach, looking at each merger on its own merits, leaving the door open for potential four-to-three mergers if they can prove they are pro-competition.


Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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