Assessing the case for in-country mobile consolidation

There have been a number of recent mobile mergers and proposed mergers across Europe involving a reduction in the number of mobile network operators in each market from 4 to 3. This has happened amid intense debates about the merits of mobile industry mergers in general. That debate extends beyond Europe; there was a four to three merger in Australia in 2009 and, in the US, the Federal Communications Commission (FCC) formally blocked a merger between AT&T and T-Mobile in 2009, and informally blocked a merger between T-Mobile and Sprint in 2014. In these debates, competition authorities have tended to focus on the short-term pricing implications of mergers, with a significant focus on the GUPPI framework.

This study, commissioned by the GSMA and undertaken by Frontier Economics, examines the potential positive impact of mobile mergers on investment, efficiencies and consumer welfare. It considers both the theoretical and empirical evidence for in-market mobile network operator consolidation, making use of the GSMA’s extensive database on mobile metrics. It looks at how competition authorities currently approach the task of assessing and modelling mergers in mobile markets, and suggests how this might be improved in order to produce better long term outcomes for consumers. However, the study has not been prepared in connection with any particular merger and does not attempt to predict the outcome of any specific merger. That requires competition authorities to undertake a detailed assessment based on the facts of each case.