Australia’s anti-trust regulator has voiced concerns that the proposed merger between Vodafone Australia and Hutchison’s 3 Australia could hurt competition in the local mobile market. In a ‘Statement of Issues’ published today, the Australian Competition and Consumer Commission (ACCC) said that “the proposed merger raises competition concerns in the short to medium term within the mobile telephony and MBB [mobile broadband] segments of the national market.” It added that, as the merger would reduce the number of operators in the market from four to three, the prospect of a new entrant entering the market was “practically non-existent.” It said the removal of Hutchison as “a vigorous and effective competitor” will lead to increased mobile prices for customers, noting that Vodafone and Hutchison are “each other’s closest competitors” in the metropolitan and prepaid market segments. Another concern was the two operators’ insight into the network investment plans of rivals Telstra and Optus due to the various existing network-sharing joint-ventures between the operators.
Announced in February this year, the merger aims to create an operator with 6 million customers and combined total revenues of approximately AUS4 billion (US$2.7 billion). The new company will be renamed VHA (Vodafone Hutchison Australia) but is expected to market its products and services under the Vodafone brand. Following the publication of today’s statement, the ACCC has now given the parties involved a chance to resolve areas of concern it has highlighted. The regulator is scheduled to publish its final decision on 6 May.