September 11, 2015
Danish Merger Case Marks a Reversal in Recent Trend Towards Consolidation in European Mobile Markets
Brussels: The GSMA commented on the news that TeliaSonera and Telenor will abandon the proposed merger of their respective business units in Denmark, a disappointing development for an industry in need of greater consolidation. The companies have not been able to come to consensus with the European Commission on acceptable conditions to advance their plan to create a stronger combined mobile operator.
“Mobile operators are focused on making the investments and network upgrades required to deploy 4G services to all corners of the continent. However, it is only through a market-driven process of rationalisation that Europe’s mobile network operators can unlock the full potential for the industry to deliver durable benefits for consumers and businesses in the form of innovation, improved quality of service, and reduced costs for mobile broadband,” said John Giusti, Deputy Chief Regulatory Officer, GSMA.
Analysis carried out by the GSMA and Frontier Economics* indicates that there is no evidence that unit prices for consumers in three-player markets are higher than for those in four-player markets. However, investment per operator in building out their networks will likely be higher in three-player markets and this higher investment can help to reduce long-term prices for consumers and business through better and faster services.
“While each individual proposed merger is different, it would appear that the post-completion market concentration levels in Denmark would not be dissimilar to those seen in mergers in Austria, Germany and Ireland, all of which were recently cleared. The recently appointed EU Commission has pledged to support a stronger telecoms sector to regain the region’s leadership and recent public statements appeared to signal support for the long-term investment that will deliver the services consumers and businesses are looking for. The failed merger marks a disappointing reversal in a recent trend towards consolidation to foster investment and innovation in European mobile markets,” concluded Giusti.
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