The European Commission (EC) expanded an investigation into T-Mobile Netherlands’ acquisition of Tele2’s local unit, after fears around competition and consumer impact prevented the deal being waved through at the first stage.
In a statement, the EC outlined its fear the reduction of the number of operators in the Netherlands from four to three would “limit the merged entity’s incentives to compete effectively with the remaining operators”, potentially increasing prices and lowering network investment.
Other issues set to be assessed include the impact on wholesale terms for MVNOs and concerns post-merger operators would coordinate competitive behaviour.
EC Competition Commissioner Margrethe Vestager (pictured) added the probe would determine if the combination would lead to “higher price or less choice in mobile services for Dutch customers.”
T-Mobile is the third largest operator in the country, with Tele2 the fourth. In terms of connections, including cellular IoT, combining the two operators’ bases would give it a market share of 22 per cent – based on GSMA Intelligence figures for Q1 2018.
The two other players in the market – VodafoneZiggo and KPN – have shares of 28 per cent and 50 per cent respectively on the same metrics.
T-Mobile’s proposed €190 million acquisition for a majority stake of rival Tele2 was first announced in December 2017, with T-Mobile’s chief hailing the move as creating a player to break up the country’s “duopoly” and offering customers wider choice.
Under the terms of the deal T-Mobile parent Deutsche Telekom would take a 75 per cent stake in the new entity with Tele2 holding the remainder.
Responsibility for clearing the deal is down to European authorities, with Dutch regulator Authority for Consumer Markets aiding the EC rather than undertaking its own review.
The EC had until yesterday (12 June) to either clear the deal or begin a wider review. A final decision is expected on, or before, 17 October 2018.