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EU to Investigate Merger of Danish Telecoms Networks

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The European Commission has opened an investigation to assess whether the proposed joint venture between the Danish operators TeliaSonera and Telenor is in line with the EU Merger Regulation.

Both companies provide telecommunications services in several European countries.

The Commission said that it has concerns that on the Danish mobile telecommunications markets, the merged entity would face insufficient competitive constraint from the only two remaining players.

In Denmark, TeliaSonera and Telenor both provide mobile and fixed telecommunications services, as well as broadband and television services. TeliaSonera provides mobile telecommunications services under its main brand Telia, as well as under two sub-brands Call Me and DLG Tele. Telenor provides mobile telecommunications services under its main brand Telenor, as well as under two sub-brands CBB Mobil and BiBoB.

Margrethe Vestager, Commissioner in charge of competition policy commented: "Telecoms constitute an important service in many people's daily life. My aim is to make sure that the proposed transaction will not lead to higher prices to Danish consumers and businesses".

The proposed transaction would combine the number two and number three operators in the mobile retail market, and would reduce the number of Mobile Network Operators in Denmark from four to three. It would create the largest player both in terms of revenue and number of subscribers, followed by a similar-sized TDC and smaller player Hi3G.

The Commission therefore has concerns that the transaction could reduce the merged entity's and its competitors' incentives to compete, leading to higher prices, loss of innovative offers and lower quality on the Danish retail mobile telecommunications market. The transaction would also lead to a reduction in the number of MNOs able to offer wholesale services, thus reducing the choice of alternative host networks, and weakening the negotiating position of wholesale customers (other companies wanting to provide mobile telecommunications services without owning their own network). Finally, the merger would result in a highly concentrated market structure with two large and symmetric operators at the retail and wholesale level. The Commission has concerns that this could lead to coordination between the remaining operators.

The Commission will now investigate the proposed transaction in-depth in order to determine whether its competition concerns are confirmed or not.

The Commission now has 90 working days, until 19 August 2015, to take a decision.

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Tags: european commission  teliasonera  telenor  Denmark