ACM conditionally clears acquisition of Open Tower Company by Dutch telecom operator KPN

The Netherlands Authority for Consumers and Markets (ACM) has conditionally cleared the acquisition of antenna-site provider Open Tower Company (OTC) by Dutch telecom operator KPN. As a result, KPN, together with Dutch pension provider APG, has become shareholder of OTC. ACM has decided this following an investigation into the effects of this acquisition. With the imposition of certain conditions, other telecom operators continue to have fair and equal access to the antenna sites of OTC. This has taken away the risk of higher prices or reduced network coverage.

Antenna sites can be used by antennas for mobile telecom services. Examples of antenna sites are cell phone masts. Telecom operators install their antennas at these sites, so that consumers and businesses have excellent coverage everywhere on their mobile phones or other mobile devices. At the same time, there is social resistance against the creation of antenna sites. Telecom operators therefore use both antenna sites of their own as well as those of others, such as OTC’s. With these, they are able to achieve outstanding national coverage.

With the acquisition, KPN expects that OTC will be better able to install new cell phone masts for KPN as well as for other telecom operators. This takes place in competition with market participants such as Cellnex and VodafoneZiggo.

Conditions: fair and equal access for other businesses

ACM attaches the following conditions to this acquisition, among other conditions:

• Other telecom operators must continue to have access to OTC’s antenna sites under fair and equal conditions and tariffs, also after the acquisition. This means, among other things, that the service to other telecom operators must be of at least the same high quality as that of the service offered to KPN. For granting access to antenna sites, OTC applies a transparent procedure. Existing agreements with telecom operators will be honored.
• In addition, a procedure has been drawn up, which stipulates that KPN cannot use any business-confidential information from competitors to boost its own position.

Why has ACM imposed conditions?

Various telecom operators such as Odido and VodafoneZiggo have expressed concerns to ACM regarding the acquisition. Following the investigation, ACM saw the risk that, as a result of the acquisition, KPN could reduce access to the antenna sites. That could lead to reduced network coverage or higher prices among competitor telecom providers. In addition, ACM saw the risk that, as a result of the acquisition, KPN could use competition-sensitive information from its competitors to boost its own position, for example information about preferred locations of future antenna sites. That would give KPN an unfair advantage when acquiring suitable locations for antenna sites. The conditions take away these risks.

ACM’s concentration control: mergers, acquisitions, and joint ventures

With any acquisition, there is a question of whether sufficient competition will remain on that market, right after the transaction as well as in the subsequent years. Competition ensures that products are of high quality, and that they are offered on the market at competitive prices. Competition also promotes innovation. That is why ACM decides in advance whether or not a company can acquire another company. An acquisition cannot go through if the concentration has negative effects on competition and, by extension, on price, quality, or innovation, and therefore ultimately also on consumers. ACM assesses whether the markets involved will continue to work well for people and businesses, now and in the future.