The Swiss competition authority Weko has decided to prohibit the proposed merger of TDC subsidiary and Swiss telecommunications operator Sunrise and Orange Switzerland. Weko's investigation into the merger's effects on the Swiss mobile market came to the conclusion that the merger would not lead to more competition as both parties have been claiming since the merger was announced. If Sunrise merges with Orange, the Swiss mobile market will have only two mobile operators (Swisscom and Orange/Sunrise), both with significant market power. Weko expects that this situation will not lead to more competitive offers from either operator and does not expect that a new third mobile operator will enter market. The authority also found no evidence that the synergies from the merger, which should flow through to end-user prices, would be enough to offset less competition from the duopoly. TDC and Orange's parent France Telecom said they are disappointed with Weko's decision as they are convinced that the merger would lead to a better market for Swiss consumers. They claim that without the merger, Swisscom will be able to keep its dominant position on the Swiss mobile market. France Telecom and TDC will assess their available options regarding potential next steps.
Swiss online price comparison portal Comparis.ch has welcomed the decision from Weko to prohibit the merger between Sunrise and Orange Switzerland, claiming it is better for consumers that are three mobile operators competing on the Swiss mobile market. At the same time, three Swiss consumer protection organisations (SKS, FRC and Acsi) have also welcomed the merger's veto, claiming that Weko followed their reasoning that the merged combination would have to much market power and will create a duopoly on the Swiss mobile market. They now demand that the Swiss parliament revises the existing telecommunications law focussing on strengthening regulatory bodies by introducing ex-ante regulation instead of the existing post-ante regulation. The organisations also want better conditions for consumers to change provider and get rid of the automatic contract extension.
