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Belgium : Mergers - Commission approves acquisition of GTS Central Europe by Deutsche Telekom [TendersInfo (India)]
[April 16, 2014]

Belgium : Mergers - Commission approves acquisition of GTS Central Europe by Deutsche Telekom [TendersInfo (India)]


(TendersInfo (India) Via Acquire Media NewsEdge) The European Commission has cleared under the EU Merger Regulation the proposed acquisition of telecommunications company GTS Central Europe ("GTS") of Luxembourg by rival Deutsche Telekom ("DT") of Germany. The Commission concluded that the transaction would not raise competition concerns, because the merged entity would continue to face strong competition after the merger and customers would still have sufficient alternative suppliers in all markets affected.



The Commission examined the effects of the merger on competition in several markets in Hungary, Romania, the Czech Republic and Poland, where the parties have overlapping activities or vertical links. GTS' Slovak business is not concerned by this transaction.

The activities of the two companies overlap in the markets for wholesale leased lines and retail business connectivity in Hungary and Romania as well as in the markets for domestic call transit services in the Czech Republic and Hungary. The Commission concluded that the acquisition would not raise any competition concerns in these markets. The Commission found, in particular, that other strong players, such as Invitel and UPC in Hungary, Telefonica and Dial Telecom in the Czech Republic and Orange and Vodafone in Romania, will continue to compete with the merged entity in these markets.


The Commission also assessed the impact of the transaction on a large number of markets where the merging companies are active at different levels of the supply chain. More specifically, the Commission focused on the following markets: The upstream market for the wholesale provision of leased lines and the downstream markets for (a) retail business connectivity services and (b) retail supply of mobile telecommunication services, in Hungary and Romania. The Commission's investigation confirmed that customers in the downstream markets will be able to source from alternative suppliers or to partially switch to alternative inputs (such as Ethernet solutions, Internet Protocol-Virtual Private Network services or dark fibre). The merged entity will also be unable to hinder or shut out its competitors in the wholesale leased lines market because of its limited presence and the existence of several alternative customers in the two downstream markets.

The upstream market for the wholesale provision of domestic call transit services on fixed networks and the downstream markets for (a) the retail supply of fixed voice services in Hungary and (b) the retail supply of mobile telecommunication services to end customers in Hungary and the Czech Republic. Domestic call transit services are used to connect two telephony networks which do not have direct interconnection agreements so that callers on one network can reach numbers hosted on a different network.

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