Belgian Competition and Telecoms Authorities disagree over acquisition of Mobile Vikings by Proximus
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Belgium
I am a Competition and Trade Partner at Bird & Bird in Brussels admitted to the Brussels and Amsterdam bars and I currently hold the position of Diversity and Inclusion Officer of the International Bar Association's Communications Committee.
Counsel
Belgium
As Counsel in our Competition & EU Law practice in Belgium, I provide advice to our clients on a wide range of matters in EU and Belgian competition law. In addition, I assist clients in trade defence matters.
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In February 2021, Proximus, Belgium’s incumbent telecom provider, started prenotification talks with the Belgian Competition Authority (BCA) with a view to taking over Mobile Vikings, a mobile virtual network operator (MVNO), which previously formed part of the DPG group. As part of its analysis, the BCA had requested the telecoms regulator, the Belgian Institute for Postal and Telecom Services (BIPT) for its opinion on the transaction. The BIPT later also intervened as an interested third party and participated in an oral hearing.
The BIPT argued that the BCA should block the concentration. Most importantly, the BIPT posited that Mobile Vikings was a maverick and a close competitor of Proximus on the highly concentrated retail market for mobile telephony services. The BIPT argued that a number of users had in the past made the switch from Proximus to Mobile Vikings, showing the competitive pressure which the latter exerts on larger players. In that regard, it in particular pointed to Mobile Viking’s aggressive pricing strategy. The BIPT therefore alleged that the transaction would lead to “a reduction, if not neutralisation, of competitive pressure” and “would have a potentially negative impact on prices”.
The BCA carried out a detailed economic analysis on the basis of which it disagreed with the BIPT’s arguments. It found that the Proximus-Mobile Vikings churn rate was fairly modest and that the real competitive pressure on Proximus was in fact exerted by larger competitors, such as Telenet-Base and Orange. The BCA therefore considered that Mobile Vikings could not realistically be seen as a “fourth player” on the market or as a close competitor of Proximus. The BCA also posits that growth opportunities for Mobile Vikings were limited by the public’s perception that the MVNO has inferior network quality. With regard to the price levels in Belgium, the BCA’s economic analysis lead to the conclusion that Proximus would not have a significantly increased incentive to increase prices post-transaction. On 31 May 2021, the BCA therefore approved the transaction. The BCA’s full decision is available here, in Dutch.
For more information please contact Hein Hobbelen and Baptist Vleeshouwers.
