Tele2 said the European Commission (EC) has announced its decision to initiate a Phase II investigation into the acquisition of Tele2 Netherlands by T-Mobile Netherlands. The group said the move is expected and in line with expectations the deal will close during the second half of this year. The EC now has 90 working days to reach a final decision, to see if the transaction is compatible with EU merger rules: in principle, this implies a decision in the fourth quarter.
According to a report by Reuters, the European competition watchdog is looking at a four-month investigation for the acquisition.
The European Commission's step is in line with previous studies of planned acquisitions and concentrations in other countries, where the number of players was reduced from four to three. The European antitrust regulator mainly wants to prevent consumers from being confronted with higher bills due to a lack of competition because of acquisitions or mergers. The EC also regularly extends investigation periods for planned takeovers.
The question is whether the planned takeover of Tele2 NL by Deutsche Telekom will be allowed to continue. Deutsche Telekom wants to take over the Dutch activities of Tele2 and combine them with T-Mobile in the Netherlands. T-Mobile NL is currently the third player on the Dutch market, with Tele2 NL in fourth place.
Harder line when going from four to three players
In 2015, the European Competition Watchdog in Denmark blocked the merger between TeliaSonera and Telenor. In 2016, the same happened in the UK when the EC blocked the merger between 3 UK and O2 UK. A concentration on the Italian market was permitted under strict requirements. Recent concentrations in Germany and Austria, with the market shrinking from four to three players, were approved without further conditions.
Dutch market transformed by FMCThe Dutch telecom market has changed over the past year due to the emergence of Fixed Mobile Convergence (FMC), with KPN and VodafoneZiggo both looking to attract customers to both fixed and mobile services through discounts and extras. Tele2 NL and T-Mobile NL have to date had a Mobile First strategy, although T-Mobile very recently announced that it wants to compete with KPN and VodafoneZiggo in the field of FMC.
