Posted by on Jun 26, 2018 |

Brussels – MVNO Europe welcomes BEREC’s study report on mobile post-merger prices and quality in Austria, Ireland and Germany and calls upon national authorities in charge of radio spectrum to further consider independent Mobile Virtual Network Operators (MVNOs) when granting radio spectrum licences and seeking credible remedies in telecom consolidation proceedings.

In light of the several mergers and acquisitions that took place in recent years on telecommunications markets and being aware that such economic developments can have a significant effect on market structures and competitive dynamics, the BEREC investigation found that, in all three cases, retail prices increased after the merger. In other words, the merger procedures negatively affected mobile end-users, made them pay more than they used to for their mobile subscriptions and created a need for counterbalancing measures.

Only focusing on behavioural remedies, the study concludes that granting access to MVNOs can be effective redress solutions to the 4-to-3 mobile mergers– like in the Austrian 2013 Hutchison/Orange merger. However, the BEREC underlines that it may take substantial time for such a remedy to produce results. This observation seems logical as, for two of the three cases analysed, data was available only for one and a half years after the merger.  Therefore, only short- to medium-run effects could be estimated.

As developing an MVNO business – like the development of any other business – requires a minimum of time, MVNO Europe invites the BEREC to perform additional ex-post analysis three to five years after merger operations. After such a period of time, the remedy effects of MVNOs on competition and market prices will become much more visible.

In light of the advent of 5G, it is indispensable that entry barriers to the market and access to new network technologies are facilitated for MVNOs – be they light or full MVNOs – so that they can truly provide end-user benefits through state-of-the-art innovation in areas such as the Internet of Things and high-speed Internet. More precisely, as far as MVNO Europe members are concerned, ideal remedies to ensure maximum MVNO countervailing effects on the market appear to be a combination of:

  1. Full MVNO access mandated on the Mobile Network Operator(s) concerned (e.g. as part of radio spectrum licensing or merger proceedings)
  2. Long-term, predictable and competitive wholesale access / traffic conditions and
  3. Structural commitments boosting the MVNOs’ customer base towards critical mass (e.g. by requiring merging MNOs to sell part of their customer base, and part of their sub-brands or shops, to a remedy taker MVNO).