European Commission (EC) objections to a proposed merger of T-Mobile Netherlands and Tele2 Netherlands centres on a belief the deal will ultimately lead to higher prices, Deutsche Telekom revealed.
T-Mobile’s parent announced it had received a statement of objections from the EC which, at heart, argues the reduction in the number of mobile operators in the Netherlands from four to three would impact competition, particularly in the consumer segment, and so increase prices.
Deutsche Telekom said it and Sweden-based Tele2 disagree with the EC’s objections, noting the merged entity would have a market share of around 25 per cent, still well behind the country’s top two players KPN and VodafoneZiggo.
The companies also noted discounts offered by rivals as part of their fixed-mobile bundles are the key drivers of competition in the market. T-Mobile acquired Vodafone’s fixed assets in the country in 2016, a requirement imposed on the latter as part of its merger with Ziggo.
Deutsche Telekom and Tele2 also said EC concerns over the reduction in operator numbers are somewhat unfounded: the merger “is not a traditional” four-to-three deal “since Tele2 NL is, to a large extent, dependent on the network of T-Mobile NL to offer its mobile services”. As a result, the tie-up would create a “third sustainable player in the key segment of fixed-mobile services” without reducing competition.
Finally, the pair again argued combining their Netherlands operations would deliver the scale required to “counter the dominance of KPN and VodafoneZiggo”, which currently face no resistance to increasing fixed broadband prices.
Deutsche Telekom noted Netherlands competition regulator ACM had expressed concern about the dominance of KPN and VodafoneZiggo. It also criticised the EC for failing to recognise the benefits the operators say the merger will create “despite all the time the process has taken and the voluminous amount of information provided”. The window of opportunity for the combination is “closing fast”, it added.
The EC opened a probe into the deal in June. While it initially targeted a completion date of 17 October, the deadline was subsequently extended for an unspecified period.Subscribe to our daily newsletter Back