Syniverse Faces EU Probe Over Plans to Buy Mobile Rival Mach

Syniverse Holdings Inc.’s bid for Mach, a rival provider of services to mobile-phone companies, faces an in-depth probe by European Union antitrust regulators.

The European Commission said the deal may hamper competition because it would create the largest data-clearing house “by a very wide margin” globally for settling usage records for consumers making calls on other networks, according to an e-mailed statement. It extended the deadline to rule on the deal until May 15, 2013.

“At this stage, there are doubts that the parties’ competitors for these services could represent a credible alternative for mobile operators,” the EU said. “If these doubts are confirmed, the merger could also cause a price increase and a reduction of the quality of these services.”

Syniverse, owned by Carlyle Group, agreed to buy Luxembourg-based rival Mach for about 550 million euros ($731 million) in July. It said the deal would allow it market more services, including fraud prevention. Carlyle agreed in 2010 to take Syniverse private in a $2.6 billion transaction.

Bobby Eagle, a spokesman for Syniverse, and Eileen Preston, a spokeswoman for Mach in London, declined to comment on the EU decision.

Market Power

The combined firm would also have “significant” market power in the settlement of invoices that mobile phone operators send to each other to cover the costs of their subscribers’ using rival networks, the EU said. The company would also control data feeds that mobile operators use to detect roaming fraud.

EU regulators approved Syniverse’s 2007 purchase of competitor Billing Services Group Ltd.’s European business, even though the deal would reduce the number of providers of clearing services for telecommunications roaming services from three to two. The EU said today it cleared the earlier deal because Mach remained on the market as a strong competitor to Syniverse.

The Brussels-based authority said at the time that Mach had a market share of up to 65 percent in 2006 for mobile roaming data clearing services in Europe.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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