Telenor and TeliaSonera on Tuesday insisted that their planned merger in Denmark will boost competition in the market, contrary to the view of the European Commission, which issued a statement of objections to the deal.
A statement of objections is the formal process through which the European Commission informs parties to a deal in writing of any suspected antitrust violations. The recipients have the right to reply in writing and request an oral hearing on the matter.
The Commi ssion has yet to make public the details of its statement of objections in this case. However, it is clear from Telenor and TeliaSonera’s comments that its concerns centre on a reduction of competition in Denmark.
The operators themselves disagree.
"We firmly believe the merger will ultimately be beneficial for competition and Danish consumers," the telcos said in a joint statement. "We will continue in a constructive dialogue with the Commission to make sure all concerns are properly addressed."
The operators said that despite the Commission’s objections, they remain confident that the deal will close in the second half of this year, noting that receipt of a statement of objections is "an ordinary event in the context of a merger of this type."
TeliaSonera and Telenor agreed to merge their Danish operations late last year, a move that would leave three mobile network operators in the market. The merged entity would have a market share of around 40%.
The European Commission opened an in-depth investigation into the planned merger in April, expressing concerns that the deal could have a negative impact on competition.
At the time, the Commission warned that the two other players in Denmark, incumbent TDC and the market’s smallest player 3, might struggle to compete effectively with the merged outfit, warning that "this could lead to higher prices and less innovation."
But Telenor and TeliaSonera argue that the competitive dynamics of the market actually make their tie-up a necessary move.
"Competition in the Danish mobile market is fierce and will remain so in the future. Combining Telia and Telenor in Denmark is about creating a company with the scale and the capacity to better invest and compete on price, quality and innovation," they said on Tuesday.
"Delivering on this requires investments and if we look back on recent years this has been a challenge," they said. "The status quo would lead to a continued drop in investment."
Thus they insist their merger will be beneficial, rather than detrimental, to consumers.
The Commission has another couple of months to make a decision on the merger.
