No doubt that in analyzing market impacts and competitive concerns, every proposed merger is different. The analysis is necessarily fact-intensive, or should be. Unfortunately, there are some who generally fall back on well-worn mantras, such as "big is bad," or in the case of the wireless market, "less than four facilities-based competitors" is unacceptable.
With this in mind, I find the EU Commission's approval of T-Mobile NL's acquisition of Tele2 NL very interesting. EU Commissioner Margrethe Vestager, cdertainly no slouch when it comes to antitrust enforcement, said: "Access to affordable and good quality mobile telecom services is essential in a modern society. After thoroughly analysing the specific role of T-Mobile NL and the smaller Tele2 NL in the Dutch retail mobile market, our investigation found that the proposed acquisition would not significantly change the prices or quality of mobile services for Dutch consumers".
Key facts: The merger involved the third and fourth largest wireless operators in the Dutch retail market. After the merger, the combined company would have approximately a 25% market share. The EU Commission certainly didn't accept the notion, accepted in some quarters as almost religious dogma, that a national wireless market must have at least four facilities-based carriers in order to be effectively competitive.
Now, back in the states, T-Mobile's proposed merger with Sprint would combine the third and fourth largest carriers. After the merger, their combined share of the facilities-based wireless market would be approximately 30%, still trailing either of the two largest U.S. providers, Verizon and AT&T, in market share.
Also, noteworthy, turning back complaints from mobile virtual network operators that they would be disadvantaged, the EU declared: "[T]he investigation showed that any potential change in conditions for virtual mobile network operators due to the proposed merger would not have a serious impact on the level of competition in the Dutch mobile telecoms market."
Again, I am not saying, of course, that the EU's decision should dictate the outcome of the FCC and the Department of Justice T-Mobile-Sprint transaction reviews. As I said at the outset, the analysis of each merger is fact-intensive.
I am just saying…that the EU Commission decision is worth considering.
P.S. For much more regarding the context in which the proposed T-Mobile/Sprint merger should be evaluated by the U. S. authorities, see the Free State Foundation's comments and reply comments filed in the FCC's transaction review proceeding.
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