EU antitrust regulators will this week warn Telenor and TeliaSonera about the adverse impact of their plan to combine forces in Denmark. Telenor and TeliaSonera are seeking to boost margins in their toughest market by merging their Danish mobile activities, allowing them to better compete with former incumbent TDC and Hutchison Whampoa’s majority owned Hi3G.
EU antitrust regulators will this week warn Norwegian telecoms company Telenor and Sweden’s TeliaSonera about the adverse impact of their plan to combine forces in Denmark, two people familiar with the matter said on Monday. Telenor and TeliaSonera are seeking to boost margins in their toughest market by merging their Danish mobile activities, allowing them to better compete with former incumbent TDC and Hutchison Whampoa’s majority owned Hi3G. The EU warning, in a charge sheet known as a statement of objections, is likely to put pressure on the companies to offer concessions to get the deal through. Such a warning however usually paves the way for the EU competition enforcer to veto a proposed merger unless companies can head off the concerns or offer concessions. «The statement of objections is expected to be sent to the companies this week,» the people said. The Commission in April launched a full-scale investigation in to the deal, saying it may reduce incentives among telecoms operators to compete while also weakening wholesale customers’ negotiating positions. It noted the merged company would be the largest player in Denmark. Commission spokesman Ricardo Cardoso declined comment. The Commission has set a Sept. 2 deadline for its decision. Telenor said it was not aware of the Commission’s plans to issue the statement of objections and it would comment only if and when it received the document. TeliaSonera spokesman Henrik Westman declined comment but said the company expects to get approval during the second half this year. The warning to Telenor and TeliaSonera will come a week after European Competition Commissioner Margrethe Vestager sounded the alarm about excessive consolidation in the telecoms industry, saying this could lead to higher bills for consumers and less innovation among companies. European Commission President Jean-Claude Juncker and European Digital Commissioner Guenther Oettinger, in contrast, have called for a more lenient antitrust view of telecoms mergers, on the basis this would create jobs and spur investment.