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November 28, 2018
Has Vestager thrown Dutch consumers under the bus for political gain?

  • T-Mobile/Tele2 merger get unconditional OK despite competition concerns
  • Consultant who advised EU on deal surprised by U-turn
  • Commission insists its decision was based on facts and law From in-depth investigations and a statement of objections, to sudden, unconditional EU approval: something stinks about the T-Mobile Netherlands/Tele2 merger

Late on Tuesday, the European Commission cleared T-Mobile Netherlands’ €190 million acquisition of smaller local rival Tele2, without imposing a single remedy, despite the fact that it will reduce the number of mobile network operators in the country to three from four.

It stands in stark contrast to competition commissioner Margrethe Vestager’s track record of reticence about in-market consolidation. She has insisted in the past that merging telcos divest sufficient assets to facilitate the entry of a new player. The most recent example would be Italy, where the Wind/Tre merger led to the entry of a new fourth player in the form of France-based Iliad.

“I think the reason the Commission changed their mind is very obvious and it is [because of] political intervention,” said Antonios Drossos, managing partner of consultancy Rewheel.

He directed TelecomTV to a Bloomberg article published in October in which German chancellor Angela Merkel criticised the EU’s competition laws and spoke of a need for the continent to develop global players. To illustrate her point, Merkel compared China, which has three telcos serving 1.3 billion people, to the EU, which has dozens of operators serving around 500 million people.

Has Vestager thrown Dutch consumers under the bus for political gain?