Mo­bile phone groups lash out at length of EU merger re­views

The Pak Banker - - BUSINESS -

FRANK­FURT: 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. 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.

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