Competition Council Flags Concerns Over Vodafone–Telekom Deal

The Competition Council has raised eight concerns regarding the transactions through which Vodafone Romania S.A. intends to acquire Telekom Romania Mobile Communications S.A., while Digi Romania S.A. would take over certain assets of the same company.

As a result, the two companies involved in these operations may submit commitment proposals to the competition authority to address the identified concerns regarding the impact on the competitive environment. These commitment proposals will be evaluated and submitted for public consultation on the institution’s website.

“It is essential that, following these transactions, the quality of services offered to consumers does not decrease but rather improves. We want to ensure that networks will operate at high standards, that coverage and service speeds will remain competitive, and that infrastructure investment plans will continue so that users benefit from better services in the long run. We are evaluating all competitive effects and collaborating with ANCOM, but we also want to hear the views of those affected,” stated Bogdan Chirițoiu, President of the Competition Council.

The concerns resulting from the competition authority’s analysis refer, among others, to pricing conditions and the impact on the quality of certain services provided to customers.

Thus, the two transactions could negatively affect the quality of mobile internet services, particularly in terms of average download speeds. There is concern that the spectrum resources the two companies would hold might not be fully utilized.

Additionally, Orange Romania S.A.’s access to co-location services on Telekom Romania Mobile Communications S.A.’s mobile telecom sites could be affected.

Moreover, the transactions may negatively impact the wholesale market for mobile network access and call origination services in Romania, due to the potential disappearance of Telekom as a service provider. This issue, coupled with Digi’s lack of a viable alternative, could lead to a deterioration in access offers for Mobile Virtual Network Operators (MVNOs).

Another concern of the Competition Council relates to the potential impact on the availability of prepaid mobile services for Telekom customers taken over by Digi Romania. There is a risk that these services might be offered for only a short period, under poorer quality and pricing conditions, and later discontinued.

The transaction through which Vodafone Romania S.A. intends to acquire Telekom Romania Mobile Communications S.A. could also affect the pricing conditions for postpaid individual Telekom customers being transferred, as well as the pricing of machine-to-machine (M2M) services currently provided by Telekom Romania Mobile Communications S.A.

Additionally, there could be negative effects on the commercial terms under which Telekom provides hosting services to Veridian Systems SRL, according to the existing contract.

It is worth recalling that Digi intends to acquire certain Telekom assets: rights to use certain radio frequencies, part of its towers, infrastructure and equipment, and the entire prepaid mobile telephony service business.

Vodafone Romania S.A. plans to acquire Telekom Romania Mobile Communications S.A.