A network access commitment secured the EC’s approval in Phase II, but further in-market consolidation now depends on the national competition authority
EC greenlights cableco takeovers: On 20 March 2023, the EC approved Orange’s proposed acquisition of cable operators VOO and Brutélé in Belgium. VOO, which is active in the Walloon region, provides fixed telecoms services via its own infrastructure and mobile services based on access to third-party networks. Brutélé is active in parts of Brussels and the Walloon region, where it offers fixed services using its network but markets them under the VOO brand. The EC’s decision enables the combination of the second biggest mobile operator in the country (Orange) and the second biggest fixed provider (within their footprints), and will present a stronger challenge to Telenet in the fast-growing dual- and triple-play segments. Generally, such fixed-mobile mergers (e.g. BT/EE) have proved more palatable to competition authorities than fixed-fixed or mobile-mobile deals, which have tended to require greater concessions such as infrastructure divestments (Wind/Tre) and sometimes led to a prohibition (O2/Three) or abandonment (Telia/Telenor).
Orange to provide Telenet access to existing and future broadband networks: After an in-depth investigation, the EC had concerns that the transaction, as initially notified, would:
Reduce the number of operators from three to two in areas covered by VOO and Brutélé's fixed networks, thereby eliminating Orange as an innovative and meaningful competitive constraint;
Significantly reduce competition in the markets where Orange, VOO and Brutélé are close competitors, e.g. fixed broadband services and multiple-play bundles; and
Increase the likelihood of coordination between the remaining operators within VOO and Brutélé's fixed network footprints.
To address these concerns, Orange committed to provide Telenet access to the existing fixed infrastructure it is acquiring from VOO and Brutélé for at least 10 years, as well as Orange's future FTTP network, which the EC determined will make the undertakings future proof.
Further consolidation depends on the national competition authority: By effectively replacing Orange with Telenet as an access seeker on the VOO and Brutélé networks, the EC considered that the commitments fully address its competition concerns. According to Orange, the deal will support its “convergent multigigabit strategy at a national level” and its “ambitious investment plan”. However, this transaction is not the only development the Belgian market has seen recently. Just a day after the EC’s decision, Liberty Global launched a voluntary and conditional public takeover bid for the 41% of shares in Telenet that it does not already own. Proximus then announced it had received approval from the Ghent Enterprise Court to acquire independent ISP edpnet for €20.5m, just for the Belgian Competition Authority to open an investigation into the matter. While the deal does not meet the minimum revenue threshold under EU or national law for a merger review, the regulator believes there may be scope for Proximus to abuse its dominant position.
