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Brussels green lights Vodafone, Liberty Global’s plan to merge in the Netherlands; Voda has fixed-line business buyers waiting in wings.
The European Commission on Wednesday approved Vodafone and Liberty Global’s plan to merge their businesses in the Netherlands, subject to a key condition: Vodafone must sell off its consumer fixed-line operations in the country.
Vodafone offered to divest the unit in a bid to alleviate concerns from Brussels over the potential impact the merger could have on competition in the Dutch telecoms market, the Commission said.
Vodafone recently entered the fixed-line market in the Netherlands and had the potential to become a strong competitor in that area and in the provision of consumer multiplay services, a benefit that could have been eliminated by the Liberty Global tie-up, the Commission noted. This in turn would likely have led to higher prices and reduced competition, it insisted.
However, the divestment of its fixed operations and the removal of the overlap between Vodafone and Liberty Global "fully addresses these concerns," it said, since it will allow the eventual buyer "to play a competitive role similar to that of Vodafone today."
Vodafone, which welcomed the Commission’s approval of the merger, explained that it is required to sell its fixed business before completion of the deal.
"Having already received a number of expressions of interest, the parties will now proceed with the sale process," the telco said, without naming any potential buyers.
As it stands, Vodafone is the second largest mobile operator in the Netherlands, while Liberty Global’s Ziggo is the market’s largest cable player. Vodafone uses KPN’s fixed network assets – copper and fibre – to provide fixed services to around 120,000 consumers, many of whom take triple-play services, it said.
Vodafone also said that the fixed business sale could also include MVNO access, subject to agreement on commercial terms.
"I am pleased that we have been able to approve the creation of the joint venture between Vodafone and Liberty Global in the Netherlands," said European competition commissioner Margrethe Vestager.
"The commitments offered by Vodafone ensure that Dutch consumers will continue to enjoy competitive prices and good choice," she added.
The European Commission also announced that it has rejected a request to refer the merger to the Dutch competition authority, ruling that it was more experienced and better placed to deal with the case.
The Dutch antitrust watchdog asked to review the case a month ago.
Updated later on Wednesday to include Vodafone comments.
