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BEREC finds 4-to-3 mobile mergers may push prices up

BEREC finds 4-to-3 mobile mergers may push prices up

Mergers reducing the number of mobile operators from four to three may push prices for end-users higher in the short to medium term, even with remedies such as MVNO access, according to a study published by EU regulator BEREC. As Telecompaper reports, the study looked at the mergers of Drei and Orange Austria, 3 and O2 Ireland, and O2 and E-Plus in Germany to help the EU regulators understand better the possible impact of mobile mergers and conditions imposed on the merging companies. “The data looked at prices for three usage profiles and used prices for a total of 13 countries as a control. In all three cases analysed, there is at least some evidence that retail prices for new customers increased compared to if the merger had not taken place, BEREC said. However, the patterns differed across the countries.” For Austria, where data from two years prior to the merger and three years post-merger was available, the study found that the merger led to “significant price increases” in 2014 and 2015. From 2016, the third year after the merger, the effect became considerably smaller and statistically insignificant in most usage profiles. For Ireland and Germany, data were available for only 1.5 years after the merger. In the Irish case, the results suggest that the merger led to a statistically significant price increase in all three baskets (low, medium and high usage), but that the magnitude and persistence of this effect varied. In Germany, there was also evidence of price increases for all three baskets. “The difference in the type of remedies may have also had an impact. In the Austrian case, wholesale access was guaranteed on a per-unit basis, which may have explained the slow start to new MVNOs. In Ireland and Germany, MVNOs were guaranteed capacity, meaning a greater incentive to start quickly to recoup the upfront network costs. However, in none of the countries did the structural remedies lead to the entry of a new mobile network operator.” Read more  BEREC here

  • Monday, 25 June 2018

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