NMa: KPN May Acquire Nozema Provided Masts Are Sold
The telecommunications company KPN may acquire the broadcasting company Nozema. This has been decided by the Netherlands Competition Authority (NMa). The regulator has approved a proposal by KPN which avoids a situation where competition on the market for the transmission of wireless radio signals will be restricted.
KPN undertakes to sell a number of the high broadcasting masts which the telecommunication company owns to an independent third party approved by NMa at the latest two years after NMa's decision. This relates to broadcasting masts which are used (for instance) to broadcast analogue FM radio. Nozema Services is one of the three parties in the Netherlands which makes use of these broadcasting masts for the transmission of wireless radio signals. In the intervening period, KPN will transfer the operation of the broadcasting masts irrevocably to the broadcasting mast operator, Novec. The State is the sole shareholder of Novec.
This measure removes the objection which NMa raised earlier in its advice to the Minister of Finance of June 2005. In this advice on the sale of shares in Nozema Services, NMa referred to the danger that a dominant position would emerge or be strengthened as a result of the sale to KPN.
As a result of the acquisition of Nozema Services, KPN will also obtain the exclusive control of Digitenne, since Nozema Services has a 40% interest in Digitenne. KPN already has a 40% share in Digitenne. Digitenne is the only party in the Netherlands which offers wireless digital television.
The position which KPN/Digitenne holds on the market for the transmission of television signals is very small (approximately 2%). NMa therefore deems it implausible that the merger will result in a restriction of competition on this market. The provision of television via the cable and possibly by satellite exercises sufficient competitive pressure.
As a result of the merger, KPN will also gain possession of Digitenne's DVB-T license. DVB-T (Digital Video Broadcasting Terrestrial) is a standard for the wireless transmission of digital radio, television and data signals. On the basis of this license, KPN can also transmit digital radio, television and data signals to mobile receivers (such as mobile telephones) using the DVB-H(andheld) standard. Since no other parties have such a licence, KPN could deny competitors in the area of mobile telecommunications access to the DVB-H standard. This applies, in particular, to mobile television services. As a result, competition may be restricted. However, it emerged from NMa's research that such exclusionary behaviour may also occur (to the same extent) if the acquisition ofNozema Services by KPN were notto take place. The merger neither increases nor decreases the likelihood of this. NMa therefore deems it implausible that competition in the area of mobile telecommunications will be significantly restricted as a result of this merger.
In contrast to mobile telephone services, there are sufficient alternatives to DVB-T/H mobile data services, such as WiFi and UMTS. It is not plausible that any exclusion of providers of mobile data services by KPN will have a significant effect on competition, according to NMa.