EC opens in-depth probe into Liberty Global's planned Base Belgium buy

The European Commission (EC) said it has opened an in-depth investigation to assess whether the proposed acquisition of KPN-owned Base Belgium by Liberty Global would harm competition.

The Commission said it has concerns that the transaction could lead to higher prices, less choice and fewer innovative services for customers in the Belgian market. It now has until Feb. 18, 2016 to make a decision.

Dutch operator KPN said in April it had agreed to sell its Belgian mobile unit to Liberty Global's Telenet for €1.325 billion ($1.49 billion) in cash, noting that the move would create a new fixed and mobile player in Belgium.

The transaction would combine the market's third-largest mobile operator and largest cable operator and also mark KPN's exit from the Belgian market. At the time of the announcement, Jefferies analysts said regulatory approval "should not be a major issue as it creates an integrated operator that should be able to provide more competition to incumbent [Proximus]."

For example, the acquisition should enable Base to better compete with Proximus (formerly Belgacom) in the area of fixed-mobile convergence. Base had previously provided fixed services under a triple-play offering called Snow, but stopped marketing fixed services on the Belgian market at the end of June 2015.

Nevertheless Jefferies analysts also warned that Orange's Mobistar would be the only mobile operator without fixed assets until it is able to implement a strategy of reselling cable services.

The announcement of the in-depth probe into the proposed Base deal comes as little surprise in view of a clearly hardening stance by the Commission on telecoms mergers in general. Indeed, only last week Competition Commissioner Margrethe Vestager gave the clearest signals yet that she would impose tougher conditions than her predecessor on future deals in the European telecoms market.

Although the Belgian market already only has three mobile network operators, and would not see a reduction in this number through a Base/Telenet merger, the Commission is concerned the transaction may reduce competition in the retail mobile telephony market in Belgium, where Telenet and Base compete against each other.

Telenet currently uses the Mobistar network to sell mobile services to its customers.

Commenting on the Base Belgium case, Vestager said the Commission wants to make sure that consumers in Belgium do not suffer higher prices and less choice as a result of the proposed takeover.

For more:
- see the EC release

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