If deal goes through, the newly merged company would be the third largest operator in the Dutch market.
Concerned about reduced competition in the telecom market, the European Commission has launched a probe into T-Mobile Netherlands’ deal to acquire Tele2 AB’s Dutch subsidiary Tele2 NL. Deutsche Telekom owns the T-Mobile subsidiary in the Netherlands.
“We are opening this in-depth investigation to ensure that the proposed transaction between T-Mobile NL and Tele2 NL will not lead to higher prices or less choice in mobile services for Dutch consumers,” said European Commissioner Margrethe Vestager in a press statement. Vestager is in charge of competition policy.
If the deal goes through, the merged company would be the third largest operator in the Dutch market, outweighed by competitors KPN and VodafoneZiggo. The proposed merger was announced in December of last year, with T-Mobile Netherlands to buy Tele2 NL for about $221 million in cash and hold a 25% stake in the combined company and DT itself to retain majority ownership. DT said that the combined company would operate under the T-Mobile brand, although Tele2 branding would also still remain in the market.
“This third converged player in the Dutch market will be able to compete more effectively with the KPN and VodafoneZiggo duopoly due to enhanced scale, combined spectrum resources and significant synergy potential” Deutsche Telekom said at the time the merger was announced. The company also said that the two companies’ “complementary spectrum” and “sustainable capex” would enable early 5G network deployment.
Dutch telecom is one of the most advanced telecom sectors in the world, with strong competition in the mobile sector, BuddeComm Research reports. The high level of competition actually fueled speculation that Deutsche Telekom might sell its T-Mobile operations in the Netherlands, the analyst firm said, but that line of thinking was largely dispelled when DT added Vodafone Netherlands’ fixed-line business to its T-Mobile unit in late 2016.
