1. M.8792 – T-Mobile NL / Tele2 NL
Bijeenkomst Vereniging voor Mededingingsrecht op 27 mei 2019
Annemiek Wilpshaar
Deputy Head of Unit C5 – Mergers: IT, Telecom and Media
DG Competition, European Commission
DISCLAIMER: The views expressed are my own and not necessarily those of the European Commission

2. Previous 4-to-3 Mobile Mergers
Austria = [20-30]%
Orange: [10-20]%
Hutchison: [10-20]%
Ireland = [40-50]%
Telefonica: [30-40]%
Germany = [30-40]%
Telefonica: [10-20]%
E-Plus: [20-30]%
Denmark = [40-50]%
TeliaSonera: [20-30]%
Telenor: [10-20]%
UK = [40-50]%
Telefonica: [30-40]%
Hutchison: [10-20]%
Italy = [30-40]%
Vimpelcom: [20-30]%

3. Previous consolidation in NL
Mobile + Mobile
2005
KPN + Telfort
2007
T-Mobile + Orange
2012 Reserved spectrum for new entrant
2018
T-Mobile + Tele2 NL
Fixed + Fixed
Liberty Global + Ziggo
Liberty Global + Ziggo approval readopted
Fixed + Mobile
Liberty Global/Ziggo + Vodafone / JV
Remedy was divestment of Vodafone fixed assets to T-Mobile

4. The Transaction
Deutsche Telekom group
Long standing MNO player
High quality 2G / 3G / 4G network
Active on the wholesale market
Limited fixed network
Tele2 AB group
MNO entry facilitated by reserved spectrum in 2012
4G network only:
Network sharing agreement with T-Mobile
2G/3G national roaming agreement with T-Mobile
Limited fixed network
Claimed deal rationale – Creation of strong third player able to break the KPN and VodafoneZiggo duopoly on the FMC market and invest in new technologies

5. Phase II decision adopted
The procedure
Phase II decision adopted
Art 6(1)(c) Decision
SO adoption
Oral hearing
Advisory Committee
Phase II deadline
Notification
20 WD ext.
10WD STC
2 May 2018
12 Jun 2018
12 Sep 2018
8 Oct 2018
14 Nov 2018
27 Nov 2018
30 Nov
2018

6. Market definition
Market for the retail supply of mobile telecommunications services
Including mobile sold as part of a fixed-mobile bundle
Excluding OTT apps, WiFi and OTT apps over WiFi
Private and business customers
Postpaid and prepaid customers
Territory of the Netherlands

7. Dutch retail mobile market
4 mobile network operators
Approx. 35 different mobile virtual network operators
Subscribers
Revenues
TMNL
[10-20]%
[20-30]%
Tele2 NL
[5-10]%
Combined
KPN
[30-40] %
[30-40]%
VodafoneZiggo
MVNOs

8. Competitive assessment
Non-coordinated horizontal effects
“Gap case” > elimination of important competitive constraints (ICC) resulting in a SIEC?
Key factors taken into account in the analysis:
Whether the parties are and will remain important competitive force (ICF)?
The extent to which the parties are and will remain close competitors
Competitive constraints which will be exercised post-Transaction by competitors

9. TMNL's competitive strength
Aggressive player
Disruptive launch of an unlimited data tariff
Best quality network in the Netherlands
No evidence to suggest that this would change absent the transaction
Conclusion: Important competitor

10. Tele2 NL's competitive strength
Limited market share
Pre-transaction – based on detailed review of internal documents and other evidence:
Moderate performance despite commercial efforts
Network limitations (spectrum and sites)
Absent the transaction (counterfactual) – based on detailed review of financial and network plans:
Tele2 NL will continue to flounder
Network gap with competitors would keep increasing
Conclusion: Not an important competitive force

11. Closeness of competition
Parties are currently close competitors
Degree of closeness:
Conclusion essentially relying on documentary evidence
Price: meaningfully comparing prices proved difficult; no material differences found between MNOs
Network: increasing gap in network performance between TMNL and Tele2 NL (capacity and quality)
Quantitative evidence: diversion ratios do not strongly indicate that the Parties are particularly close

12. Other players MNOs MVNOs: Limited competitive constraint
KPN: Important competitor
VodafoneZiggo: Important competitor
MVNOs: Limited competitive constraint
Heterogeneous group of different types of MVNOs
Ability to compete already limited pre-Transaction
Dependence in short and long term on MNO & MNO's network regarding main parameters of competition

13. Quantitative assessment
Calibrated merger simulation on the private segment
Main inputs: diversion ratios across operators as well as measures of prices, margins and volumes
MNP data versus Customer Survey (to measure customers' first and second choice of operator at time of their last purchase)
Predicted price effects are limited

14. Efficiencies 1. Verifiable 2. Merger specific Cumulative criteria:
3. Benefit to consumers
Cumulative criteria:
Limited efficiencies accepted:
Internalisation of Tele2 NL's costs related to the national roaming agreement with TMNL
Criteria not assessed for:
FMC
Dynamic competition
Improved cash flow position leading to more investment
Fixed-mobile substitution and combination of spectrum
Fixed cost efficiencies, other variable cost efficiencies

15. Third party complaints
Wholesale market complaint rejected
Ability to foreclose
Incentive to foreclose
But, deterioration of wholesale access terms would not have a significant impact on competition
Distributors complaint rejected
Spectrum asymmetry complaint rejected

16. Conclusion No non-coordinated horizontal effects on retail market
Limited combined market position (close to 25%)
Small increment (close to 5%)
Uncertainty about Tele2 NL's future
No coordinated effects on retail market
Asymmetry between merged entity, KPN and VodafoneZiggo
Wholesale market not affected
 No SIEC