The European Commission has announced that they will open an in-depth investigation into the proposed merger of TeliaSonera’s and Telenor’s Danish operations. This decision was somewhat expected, given the precedent from other transactions within the European mobile industry in recent years.
TeliaSonera and Telenor agreed to merge their Danish operations late last year, a move that would leave three mobile network operators in the market. The merged entity would have a market share of around 40%.
The two remaining players – incumbent TDC and the market’s smallest player 3 – might struggle to compete effectively with the merged outfit, the Commission said.
«This could lead to higher prices and less innovation,» it warned.
The Commission also pointed out that both Telenor and TeliaSonera offer fixed broadband and TV services, as well as having mobile offers under multiple brands. On the mobile side, the telcos already have a wide-ranging network-sharing deal in place.
«My aim is to make sure that the proposed transaction will not lead to higher prices to Danish consumers and businesses,» said European competition commissioner Margrethe Vestager.
The Commission has 90 days to carry out the probe. It is due to make a decision by 19 August.
TeliaSonera comments this in a press release:
We believe that this merger will create a strong and robust competitor across fixed and mobile markets in Denmark. Consumers and businesses will benefit from improved network connectivity, higher speeds and better performance in all areas of the country as well as a larger distribution network and more attractive and user-friendly services. We therefore remain confident that the merger will be approved during 2015.
We are committed to the Danish market and the merger is a necessary step to enable us to free up resources, increase investments and be active in the competition to the benefit of consumers and businesses. Continued investments in telecommunications infrastructure is a pre-requisite for keeping up with consumers’ and businesses’ demand as well as redeeming the potential for growth, competitiveness and innovation high on the political agenda in both Denmark and the EU.
We look forward to continuing our constructive dialogue with the European Commission during this new phase of the investigation.
