The Hutchinson/Orange Merger in Austria Highlights the Positive Impact of Consolidation on Quality and Innovation
The GSMA today announced the findings of a new report, “Assessing the impact of mobile consolidation on innovation and quality – an evaluation of the Hutchison / Orange merger in Austria”. This research provides evidence of the positive impact that consolidation in the mobile sector has had on innovation and quality of service by examining direct measures of consumer benefits. The GSMA urges competition and regulatory authorities to give greater consideration to the potential impact on network and service quality in merger assessment processes and regulatory assessments of mobile market structures.
The analysis shows that the 2012 merger accelerated Hutchison’s 4G population coverage by 20 to 30 per cent and delivered 4G download and upload speeds that are 7Mbps and 3Mbps higher than would have been expected without the merger. This resulted in Hutchison outperforming European operators in similar market positions. At the same time, the merger significantly increased the quality of all mobile networks, with 4G download and upload speeds increasing by more than 13 Mbps and 4Mbps, respectively. This suggests that the merger enhanced competition in network quality, with resulting benefits seen across the entire mobile market.
The results highlight the importance of dynamic efficiencies in mobile mergers and, in particular, how these efficiencies directly benefit consumers. The findings have potential implications for all competition policies that deal with market concentration, and for policymakers considering how different market structures in mobile markets can deliver sustainable competition and investments in the latest mobile technology.
“Historically, competition and regulatory authorities have focused their concern on the impact that mergers may have on price, paying less attention to the impact on quality and innovation. Today, this approach can do a disservice to consumers, many of whom highly value the benefits they receive from mobile broadband innovation and performance. The research published today demonstrates that mobile mergers can bring significant efficiencies and deliver direct consumer benefits in terms coverage and network quality. We urge authorities going forward to take a fresh look at these impacts when assessing mobile mergers.,” said John Giusti, Chief Regulatory Officer, GSMA.
Over the last several years Europe has experienced a wave of merger activity in the telecommunications sector in general, and in mobile in particular. Mobile consolidation is also becoming a feature in other regions of the world. As the industry strives to make the investment required to deliver the next wave of mobile technology to consumers, this trend is expected to continue.
The report is available for download at https://www.gsma.com/publicpolicy/evaluation-hutchison-orange-merger-austria.
About the GSMA
The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 300 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai, Mobile World Congress Americas and the Mobile 360 Series of conferences.
For more information, please visit the GSMA corporate website at www.gsma.com. Follow the GSMA on Twitter: @GSMA.
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