The European Commission this week launched an in-depth investigation into Liberty Global’s €1.33 billion acquisition of Belgian mobile operator Base on grounds that it could harm competition.
The deal, struck in April, proposes to merge Base with Liberty’s local arm Telenet, a cableco that also offers mobile virtual network operator (MVNO) services. At the end of the second quarter, Telenet served 953,700 mobile customers, compared to Base’s 3.2 million.
"Consumers increasingly depend on reliable and competitive telecoms services to keep in touch and to access information. We want to make sure that consumers in Belgium do not suffer higher prices and less choice as a result of this proposed takeover," said EU competition commissioner Margrethe Vestager, in a st atement on Monday.
The Commission is concerned that the merged entity will be less inclined to compete aggressively with Belgium’s other two mobile operators, Proximus and Mobistar. It is also worried that the transaction will reduce incentives for Base to offer wholesale services.
"This would probably lead to worse conditions for mobile virtual network operators needing access to mobile networks and therefore to less competition in the retail mobile telephony market," the EU said.
The Commission’s investigation will consider these issues, as well as whether the merger will increase Telenet’s market power sufficiently enough to enable it to exclude competitors.
Following the investigation, the EU will issue a decision on whether to approve the transaction on 18 February 2016.
