Two of Belgium’s official regulators are locking horns over the takeover earlier this year by Proximus of the unconventional telecoms provider Mobile Vikings.
Mobile Vikings began life as an independent operator offering cheap deals for a stripped-down service of internet, text messages and phone minutes. The service was at times patchy, customers complained, but the no-frills package made it popular with young people especially.
Mobile Vikings never had its own infrastructure, first camping out on Telenet’s, then decamping to Orange.
The company was then taken over by the rather more staid DPG Media, which owns properties like VTM and Het Laatste Nieuws. At at the start of this year, DPG sold Mobile Vikings to Proximus, the former state monopoly and still the market leader ahead of Telenet. The rebel image seemed gone forever inside the belly of the beast.
This week, the Belgian competition authority gave the go-ahead to the takeover. Their investigation had shown up no evidence that the takeover would limit competition on the market should it be allowed to go ahead.
Mobile Vikings is a small operator, and the effect it can have on competition is extremely limited, the investigation found. However it is common for large players to build up an unassailable competitive position precisely by swallowing up smaller companies, whether they are powerful players or not.
For example: the gigantic international brewer AB InBev, when faced with a growing trend towards craft beer and away from ordinary lager, started buying up small brewers like Bosteels, makers of Kwak and Tripel Karmeliet.
However another regulator, the telecommunications authority BIPT, is of another opinion.
As far as the BIPT is concerned, the takeover will reduce competitive pressure in the market, and will tend to allow prices – which in Belgium are already sky-high compared to neighbouring countries, especially given the level of service provided – to remain at an artificially-inflated level.
The BIPT also considers the acquisition of Mobile Vikings will strength Proximus’ position in the market for pre-paid cards and packages involving unlimited data.
The question now is, what can be done to bring the two regulators together? The competition authority was after all operating on its own territory, and it fully entitled to take the decision it took. An appeal by the BIPT is theoretically possible, but observers said that is unprecedented, and is something all parties would be keen to avoid.
One possibility could be for the BIPT to allow the takeover to go uncontested, and then apply whatever measures are within its own remit, in an attempt to rectify what it sees as problems.
