TeliaSonera AB and Telenor ASA’s plan to merge their Danish mobile-phone operations will be probed by European regulators over concerns it could raise prices and thwart innovation.
Combining the second- and third-largest Danish mobile phone operators may see them face “insufficient competitive constraint from the only two remaining players” TDC A/S and Hi3G Denmark Aps, the European Commission said in an e-mailed statement Wednesday. That could lead to higher prices, fewer innovative offers and less quality of service for consumers.
EU Competition Commissioner Margrethe Vestager, Denmark’s finance minister until taking the EU post last year, has said consumer benefits are central to her scrutiny of phone deals. The merged carrier will have about 40 percent of the Danish market and annual sales topping 9 billion kroner ($1.3 billion).
Telenor remains “confident that the merger will be approved” this year, it said in an e-mailed statement. The commission’s decision “has been anticipated given that other transactions in the European mobile industry have been the subject of in-depth investigations in recent years,” Telenor said.
Regulators set a deadline of Aug. 19 to rule on the deal. They are already weighing Orange SA’s takeover of Spanish broadband operator Jazztel Plc and Altice SA’s acquisition of Oi SA’s telecommunications assets. Orange said it expects a decision in May and Altice plans to close its deal in the second quarter after receiving EU approval.
Hutchison Whampoa Ltd. must also seek EU permission to combine its Three unit with Telefonica SA’s O2. The EU has sought concessions before clearing previous deals that reduced the number of mobile operators from four to three in Germany, Austria and Ireland.
Johan Dennelind, TeliaSonera’s chief executive officer, said last month he didn’t expect that regulatory approval of the deal would be a quick process.
The company said Wednesday it remains “confident that the merger will be approved during 2015.”