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Commission investigating merger of TeliaSonera and Telenor

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

Both companies provide telecommunications services in several European countries.

The Commission has concerns that on the Danish mobile telecommunications markets, the merged entity would face insufficient competitive constraint from the only two remaining players. This could lead to higher prices and less innovation. The Commission has 90 working days, until August 19, to take a decision.

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.

Telecoms constitute an important service in many people’s daily life

“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,” Margrethe Vestager, Commissioner in charge of competition policy, commented.

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 transaction would also lead to a reduction in the number of operators able to offer wholesale services, thus reducing the choice of alternative host networks, and weakening the negotiating position of wholesale customers – 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.

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