The purchase would have led to ‘significant impediments to competition and consumer harm,’ said Portugal’s competition authority
Following a draft decision thwarting Vodafone Portugal’s proposed acquisition of Cabonitel, including Nowo Communications, the country’s competition authority Autoridade da Concorrencia (AdC) this week officially prohibited the deal from going forward. According to the agency, the purchase would have led to “significant impediments to competition and consumer harm.”
Vodafone has been looking to acquire Nowo since at least October 2022, when it first notified the AdC. However, it has faced an uphill battle from the start.
“Structurally, the telecommunications markets in Portugal are characterized by high and heterogeneous levels of concentration across the mainland, with customer loyalty periods and bundled offers further reinforcing barriers to customer mobility between operators, thereby reducing competition and increasing entry and expansion barriers for new operators,” the AdC said, adding that “significant parallelism” was found in the offerings of the three top operators — Meo, Nos and Vodafone. “Nowo exerts considerable competitive pressure on the other market operators. The merger would lead to significant price increases,” it continued, indicating that Nowo could increase prices by as much as 55% for its mobile products, while Vodafone price rises would be single-digit.
Further, Nowo had acquired 5G spectrum reserved for market newcomers, which of course, Vodafone, is not. To address this particular concern, Vodafone offered to sell this spectrum to Digi, the other new carrier that secured the set-aside spectrum.
Ultimately, though, that wasn’t enough to sway the regulator, and Vodafone has officially lost the fight.
