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Slight drop in tariffs following Dutch telecom merger in 2007

Following the merger of telecom providers T-Mobile and Orange in the Netherlands in 2007, mobile-telephony tariffs decreased less fast than those in countries where no merger had taken place. Following a merger in Austria in 2006, mobile-telephony tariffs decreased more than those in countries where no merger had taken place. Three regulators have drawn this conclusion from a study carried out in the Netherlands and in Austria. The study could not demonstrate that the merger was the reason behind larger or not-so-large price drops, as other factors such as an earlier merger between rival telecom providers KPN and Telfort in the Netherlands may have influenced these price drops, too.

Telecommunication in the Netherlands and Austria

In Austria, T-Mobile in 2006 acquired its rival Tele.ring, leaving four telecom providers in the Austrian market. In the Netherlands, T-Mobile and Orange merged in 2007, leaving three telecom providers, each with their own network: KPN, Vodafone and T-Mobile. Next to these telecom providers, other providers are also active in the Netherlands such as Tele2, Lycamobile and Lebara. These providers use the networks of the first three providers.

The Netherlands Authority for Consumers and Markets (ACM), the European Commission and the Austrian telecom regulator RTR carried out a joint study into the effects of the mergers in both countries. The study looked into the tariffs in each country where these mergers had taken place, and compared them with countries where no telecom mergers had occurred. In Austria, the tariffs went down fast. These price drops may hint at lasting competition between the different telecom providers.

Tariffs in the Netherlands have dropped less fast

Following the merger between T-Mobile and Orange in the Netherlands, the prices of plans have dropped less fast than those in countries where no merger had taken place. Fewer players in the market may indicate a reduced level of competitive pressure. However, the identified price effects might also be explained by the merger between KPN and Telfort in 2005. No firm conclusions can thus be drawn regarding the effect of the T-Mobile/Orange merger on prices.

Effect studies

ACM conducts effect studies on a regular basis, particularly into the effects of merger on, for example, consumer prices and consumer choice. With these studies, ACM is better able at predicting when consumers will be harmed by a merger, and where ACM needs to intervene in order to limit such negative effects.