ACCC approves Voda-Hutch merger

ACCC approves Voda-Hutch merger

New VHA merged entity will have the scale and scope to challenge Optus and Telstra

Speaking to <I>CIO</I> in April, Telecommunications analyst Paul Budde there was an argument in favour of the merger that having three stronger competitors was a more effective competition regime than two stronger and two weaker ones.

“However, by moving from four competitors to three there is more room for collusion and not competing against each other too fiercely,” he said at the time.

Budde said that if the European telecommunications experience was anything to go by, the ACCC would have difficulty in regulating issues of collusion if the Vodafone and Hutchison merger was approved.

“It may feels like collusion, look like collusion, smell like collusion, so it most probably is collusion, yet it is damn hard to regulate,” he said in April. “The EU has had this issue for nearly a decade, but despite regulators identifying misbehaviour, they have been unsuccessful it prosecuting it in court.”

Vodafone, announced in February this year, that it intended to form a 50-50 joint venture company with rival mobile carrier Hutchison Whampoa, owner of the “3” brand, and offer services under the new name VHA.

In April, the ACCC issued a Statement of Issues which warned that the proposed merger between Hutchison and Vodafone could lead to increased prices for mobile telephony and mobile broadband (MBB).

In May, Hutchison flagged that its future in Australia could be in doubt if its proposed merger with Vodafone was not given the green light by the ACCC.

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Tags VodafoneIDCaccchutchisonvhaAustralian mobile market

More about Australian Competition and Consumer CommissionAustralian Competition and Consumer CommissionetworkHutchisonHutchison WhampoaIDC AustraliaOptusTelstra CorporationVHAVodafone

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