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EU competition chief concerned about telecoms mergers

European competition commissioner Margrethe Vestager has repeated her warning that telecom operator mergers are likely to damage competition in the European market. 16 Jun 2015

In a 'state of the union' talk on antitrust in the EU, given at the New Frontiers of Antitrust conference in Paris this week, Vestager said she disagreed with the argument that operators need to merge in order to increase investment spending.

"I’ve heard this claim quite often, but I have not seen evidence that this is the case," she said.

"Instead, there is ample evidence that excessive consolidation may lead not only to less competition and more expensive bills for consumers, but that it also reduces the incentives in national markets to innovate," Vestager said.

Infrastructure can in fact be stimulated by competition, Vestager said.

"In 2009 a new player, Free Mobile, entered the French telecoms market. Following that entry, the overall level of telecoms investment in France grew, and  remains at higher levels than at the moment of Free's entry," she said.

Vestager said in March that telecoms mergers must not lead to a rise in prices for consumers.

"I have one interest and that is to make sure that European consumers —citizens or businesses — can enjoy relatively innovative markets at affordable prices," she said. 

Current merger plans include Hutchison Whampoa’s attempt to buy O2, the UK mobile group, from Spain’s Telefónica for £10bn, while Orange's is buying Jazztel in Spain.

The decision by the European Commission to allow Telefónica to buy E-Plus from KPN for €8.6 billion is being challenged by German telecoms company Airdata on the grounds that the conditions imposed on the merger were insufficient and there is now no fair competition in the German telecoms market.