Mobile Phone Groups Lash Out at Length of EU Merger Reviews

  • EU regulators take a third longer to rule on telecoms deals
  • EU takes average of 59 days to rule on telecoms mergers

A mobile-phone industry group complained that slow reviews of telecommunications mergers by European Union regulators can hurt companies by halting their business strategies for a year or more.

The European Commission took an average of 59 days to review mobile phone deals in the last 25 years, compared to 42 days for mergers in other digital industries, according to a report from the GSM Association. EU reviews can take more than seven months to conclude.

Telecoms transactions “face a much higher risk of a lengthy review that can freeze the strategic activity of the merging companies, and to some extent the entire sector, for a year or more,” the report says.

The EU’s antitrust scrutiny of mobile phone deals has already forced concessions from CK Hutchison Holdings Ltd. in Austria and Ireland and Telefonica SA in Germany before they could complete purchases. Some deals -- including TeliaSonera AB and Telenor ASA’s attempt last year to merge their Danish units -- fall apart when companies fail to placate the EU.

Hutchison Deals

The criticisms come as the Brussels-based regulator is conducting probes of Hutchison’s bids to acquire Telefonica’s O2 unit in the U.K. and Vimpelcom Ltd.’s Italian Wind business.

The GSMA report also criticizes the possibility of multiple merger reviews that can allow rivals to extract unjustified concessions from the combining companies without creating any benefit for wider competition.

EU countries typically have three or at most four mobile network operators, the European Commission said in an e-mailed statement. It is "only logical that mergers in markets" with fewer rivals "are more likely" to lead to longer investigations.

Both Kabel Deutschland’s takeover of Ono and Deutsche Telekom AG’s bid for DTS were cleared by the EU without a longer probe, it said. EU merger control seeks to avoid a reduction of competition "which would likely harm consumers."

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