The European Commission has opened an investigation into the proposed acquisition of Base by Liberty Global, looking to see if it will harm competition. Based on its initial investigation, the Commission has concerns the transaction could lead to higher prices, less choice and less innovative services for customers in the Belgian telecommunications market. The Commission now has 90 working days, until 18 February, to take a decision.
The Commission’s initial market investigation presented two main concerns, that the deal may reduce competition in the retail mobile telephony market in Belgium, where Telenet and Base currently compete against each other. The Commission has concerns that the transaction will remove an important competitive force and that the merged entity would have limited incentives to exercise significant competitive pressure on the two main remaining competitors in the retail mobile market (Proximus and Mobistar).
The Commission also has concerns that the transaction will significantly reduce the incentives for Base to offer virtual operators access to its mobile network. This would probably lead to worse conditions for MVNO operators and therefore lead to less competition in the retail mobile telephony market.
The Commission will also investigate whether the transaction would increase Telenet's ability to sell its fixed line services to Base's mobile customers (notably by bundling them together) and whether this would increase the merged entity's market power and allow it to exclude competitors.
The transaction would combine Base, Belgium's third largest mobile network operator by revenue and second largest by number of subscribers, with Telenet, Liberty Global's subsidiary and the largest mobile virtual network operator in Belgium. Telenet does not have its own mobile network and currently uses the Mobistar network to offer mobile services to its customers. It would also combine a strong fixed line telecommunications company (Telenet) with a mobile network operator (Base).
