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Mobile groups press for Brussels to probe merger

17 декабря 2009

France Telecom and Deutsche Telekom are pressing for regulators in Brussels rather than London to scrutinise the proposed merger of their UK mobile phone businesses.

The telecoms groups hope that an inquiry by the European Commission would be shorter than one by UK competition authorities.

One risk is that their UK businesses become distracted during a lengthy regulatory inquiry and lose mobile customers to Telefónica’s O2 and Vodafone.

Consumer groups are worried about the negative impact on competition of a proposed merger of France Telecom’s Orange UK and Deutsche Telekom’s T-Mobile UK, Britain’s third and fourth-largest mobile operators respectively.

Two competition lawyers, who declined to be named, said France Telecom and Deutsche Telekom could be hoping the Commission takes a more lenient view of the merger than the UK authorities.

The consumer organisation Which? is calling for UK authorities to investigate, given that a merger would create Britain’s largest mobile operator, with a 36 per cent share of revenue paid by handset users.

However, the regulatory scrutiny will begin in Brussels. The Commission has jurisdiction over the case because two-thirds of the turnover of France Telecom and Deutsche Telekom is outside the UK.

The two groups hope that Brussels will hold on to the case. The UK authorities could ask the Commission to send the case to London, but Brussels has the final say.

France Telecom and Deutsche Telekom are preparing a document about the merger and are hoping to submit it to the Commission before Christmas, although it may not happen until January.

One competition lawyer, who declined to be identified, said regulatory scrutiny in Brussels could be significantly shorter than in London.

Once it has been notified of a merger, the Commission launches an initial inquiry lasting up to 25 working days. This can be followed by an 18-week in-depth investigation.

In the UK, the Office of Fair Trading has 45 working days to complete an initial inquiry into any merger that has been referred to it by the Commission. This can be followed by a 24-week investigation by the Competition Commission.

The length of the regulatory scrutiny will partly depend on whether France Telecom and Deutsche Telekom are willing to make concessions.

Last month the two groups said they saw no need for major concessions, such as giving up valuable radio spectrum.

The European Commission and the UK authorities declined to comment.

France Telecom and Deutsche Telekom also declined to comment.

Источник: Financial Times

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