In November 2018, following an in-depth Phase 2 investigation, the European Commission (“Commission”) unconditionally approved the acquisition of Tele2 NL by T-Mobile NL, respectively the fourth and third largest players in the Dutch retail mobile telecoms market. The merged entity remains the third largest player in this market after KPN and VodafoneZiggo. This transaction is the first “four-to-three” telecom merger approved without remedies under Commissioner Vestager’s term, following earlier Commission decisions on four-to-three mergers in (i) H3G/Wind, where approval of a joint venture was conditional on the divestment of sufficient assets to allow a new MNO to enter the market; and (ii) Three/O2, an acquisition that was blocked by the Commission. It shows that there is no “magic number” for players in the telecoms market and that much will depend on the specifics of the merger.
T-Mobile NL and Tele2 NL are both mobile network operators (“MNOs”) active in the Netherlands. T-Mobile owns a mobile network with nationwide coverage over which it provides 2G, 3G, 4G and NarrowBand-Internet of Things mobile communication services. It also provides fixed broadband, TV and telephony services based on wholesale access to other operators’ fixed network. Tele2 NL has operated a 4G-only mobile network since 2015, and also offers fixed broadband services. In December 2017, the parties announced that T-Mobile would acquire 75% of Tele2’s shares for EUR 190 million.
In June 2018 the Commission launched an in-depth investigation “to ensure that the proposed transaction between T-Mobile NL and Tele2 NL will not lead to higher prices or less choice in mobile services for Dutch consumers“. The Commission outlined the following preliminary concerns:
- The reduction in the number of MNOs and the limited incentives of the merged entity to compete with KPN and VodafoneZiggo, could lead to higher prices and less investment in mobile telecommunications networks.
- The lessening of competitive pressure in the Dutch retail mobile market, could increase the potential for the coordination of competitive behaviour between the three remaining MNOs.
- Prospective and existing mobile virtual network operators (“MVNOs”), who rely on wholesale access to MNOs’ networks to offer their retail mobile services, could potentially face greater difficulties in obtaining favourable wholesale access terms from MNOs.