The proposed merger between TeliaSonera and Telenor in Denmark is being investigated by the European Commission amid concerns that a joint venture between the two carriers would result in higher prices and decreased innovation.
If the merger, which was first announced in December, goes through, the two Nordic operators will each control 50% of the joint venture, and the combined company will command 40% of the Danish mobile market with 3.5 million subscribers and expected annual revenues of more than $1.5 billion.
Consolidation in the telecom sector has been receiving increased scrutiny by the EU as of late.
A marriage between Sweden-based TeliaSonera and Norway-based Telenor would leave just two competitors in the Danish market: TDC and Hi3G, according to Margrethe Vestager, the EC’s new competition commissioner.
Vestager said she is particularly concerned about countries in which the number of operators would drop to three from four if the merger goes through, according to the Financial Times.
Specifically, the commission said it is worried that the transaction had the potential to give the merged entity and its competitors’ less of an incentive to compete, which could lead “to higher prices, loss of innovative offers and lower quality on the Danish retail communications market.”
A decision on the matter is expected by Aug. 19.
For its part, TeliaSonera expressed confidence that the deal would be approved.
Indian carriers see shares slide after ceiling tariff reduction
Shares of Indian telecom operators Bharti Airtel and Idea Cellular took a tumble this week after telecom regulator, TRAI, reduced the ceiling tariff for national roaming services, NDTV reported.
TRAI cut ceiling tariffs for national roaming services on April 9. Outgoing local calls are capped at 1-cent per minute and outgoing intercircle calls at 2 cents per minute.
The ceiling for incoming voice calls and text messages were also slashed.
Analysts said the move would likely have a negative impact on the operators’ revenue and profit margins.
Bharti Airtel Shares ended 3.26% lower at $6.47 and Idea Cellular shares closed 2.7% lower at $2.99 on April 9.
