Europe green lights Vodafone/Liberty Global merger in Netherlands

The European Commission has approved the creation of a joint venture in the Netherlands by mobile telecom operator Vodafone and cable company Liberty Global.

The deal has been in the European rumour mill for some time, though it now creates a new quad-player in the market, combining Vodafone’s mobile expertise with Ziggo’s video, broadband internet, and fixed-line telephony offerings. The new proposition will offer renewed competition to former phone-monopoly KPN, in a market which has seen competition grow quickly in recent years.

The European Commission has been reviewing the situation for some time now, and as part of the agreement, Vodafone has to divest its consumer fixed line business in the Netherlands to ensure competition remains complementary to consumers. Throughout Europe, the commission has a tendency to ensure all markets have at least four operators in each segment to ensure consumers get a fair deal.

“The telecoms market is of strategic importance for our digital society. I am pleased that we have been able to approve the creation of the joint venture between Vodafone and Liberty Global in the Netherlands,” said European Commissioner for Competition Margrethe Vestager. “The commitments offered by Vodafone ensure that Dutch consumers will continue to enjoy competitive prices and good choice.”

As part of the announcement, the European Commission rejected a request from the Netherlands to refer the merger to the Dutch competition authority for assessment under Dutch competition law, which could be viewed as an unusual move. Article 9(2)(a) allows the commission to decide which authority would be better placed to review the deal, and in this case, decided it was more qualified than the Dutch competition authorities.

This is also a deal which Deutsche Telekom will also have been keeping a keen eye on with regard to its own future in the Dutch market. Last year, Bloomberg reported the German telco was considering exiting the market, seemingly wanting to prioritize its investments elsewhere. T-Mobile Netherlands has been losing market share recently, seemingly not enjoying competition within the market, and has been rumoured to be in talks with Liberty Global over the sale of the Dutch mobile business. Deutsche Telekom was not able to find a buyer for the right price and held off a sale for the moment, though the long-term plans of the business has not seemingly been 100% confirmed.

At Mobile World Congress this year Deutsche Telekom CEO Tim Hoettges said in an interview with Bloomberg the team has built a 4G/LTE infrastructure across the country, which will enable it to create a similar proposition to T-Mobile US. The investments are available for the business to act quite aggressively. Hoettges also confirmed the company has no plans to sell its presence in the Netherlands, but did hedge the confirmation with the phrase “for the moment”.