Orange acquisition

Friday, August 24th 2007 - 16:42 CEST - Comments: 0

T he European Commission has cleared under the EU Merger Regulation the proposed acquisition of the telecommunications company Orange Netherlands by T-Mobile Netherlands, belonging to the Deutsche Telekom group. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. T-Mobile Netherlands is a Dutch Mobile Network Operator ("MNO") ultimately controlled by Deutsche Telekom. Its mobile arm T-Mobile International concentrates on mobile telecommunications markets in Western and Central Europe and the United States.

 

European Commission approves acquisition

Orange Nederland N.V. ("ONL") and Orange Nederland Breedband B.V. ("ONB"), together Orange Netherlands and currently belonging to France Télécom, are Dutch telecom companies. ONL is a mobile network operator offering mobile services to retail and business customers with a national network covering 99.9% of the Dutch population. OBB provides broadband services including high-speed internet and Voice over IP. Under the proposed transaction, T-Mobile would acquire sole control of ONL and OBB. Following the merger, T-Mobile would become the second-largest operator in terms of subscribers and the third-largest operator in terms of revenue. Market leader in terms of both revenues and subscribers remains KPN, whereas the new entity would be of a similar strength to Vodafone.

 

Dutch mobile retail market

The Commission examined the effects of the merger on the various retail and wholesale markets in the field of mobile telephony.  The Commission found that on the Dutch mobile retail market Orange has not been a particularly aggressive competitor. Following the merger, KPN and Vodafone as well as mobile virtual network operators ("MVNOs") and service providers which have exerted significant pressure on prices, will continue to compete with the new company. The Commission therefore concluded that the proposed merger would not threaten competition on the mobile retail market.

 

Mobile network operators

At the wholesale level, the Commission carefully analysed the market for access and call origination on public mobile networks, i.e. the market involving the sale of airtime minutes by the mobile network operators to MVNOs and service providers. The Commission's investigation revealed that all three network operators would have sufficient network coverage and spare capacity and that their incentives to grant access to their networks would not change. The Commission found that MVNOs and service providers would therefore have continuous access to airtime capacity at competitive conditions after the merger.

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