Brussels, 30/03/2016 (Agence Europe) - On Wednesday 30 March, the European Commission announced that it had opened an in-depth investigation into the proposed joint venture between the telecommunications activities of Hutchison and VimpelCom in Italy.
The Commission explains that the transaction would have the effect of combining VimpelCom's subsidiary WIND with Hutchison's subsidiary H3G, respectively the third and fourth largest operators on the Italian retail mobile telecommunications market.
The Commission therefore has concerns that the operation will remove two major entities from the retail mobile telecommunications market in Italy and that the joint venture would have little incentive to exert significant competitive pressure on the other competitors. This will lead to price increases and a reduction of investments in the mobile telecommunications networks.
It would reduce the number of mobile network operators (MNO), which host mobile virtual network operators (MVNO), from four to three in Italy. Existing and potential MVNOs would have less choice of host networks and hence weaker negotiating power to obtain favourable wholesale access terms. The Commission also fears that reducing the number of competitors could weaken competitive pressure and increase the likelihood that MNOs would coordinate their competitive behaviour and raise prices on a sustainable basis on the retail and wholesale markets.
“Mobile telecom services are increasingly important in our daily lives. We use our mobile phones not only to get in touch with our family and friends but also to read the news, shop online or check the train schedule. We need to make sure that the proposed transaction will not lead to higher prices or less choice in mobile services for Italian consumers”, said Margrethe Vestager, the Euorpean commissioner in charge of competition policy. (Original in French by Elodie Lamer)