Telia/ Sonera Merger

Editor's Note: This note is based on European Commission decision Case No COMP/M.2803 – Telia/Sonera. Click here to access the decision.

On May 28, 2002, a merger was proposed between Telia, a Swedish telecommunications and cable television operator and the largest service provider in Scandinavia, and Sonera, Finland’s largest mobile telephony operator and provider of national and international long distance services as well as local loop and cable TV infrastructure. The proposed merger raised both vertical and horizontal issues. The European Commission (EC) raised concerns regarding continued competition in the Finnish wireless telephony market, given Sonera’s dominant position if it didn’t have Telia as an actual and potential competitor in Finland. The European Commission also raised various antitrust issues based on the following:

  • Both had strong positions in the supply of various retail services
  • Both had monopolies over wholesale termination on their respective fixed and mobile networks
  • Both were leaders in the provision of wholesale international roaming services on their respective mobile networks

The Commission feared that the companies’ strengths in the wholesale markets could lead to foreclosure of retail competitors and monopolistic behavior.

On July 9 2002, the European Commission approved the merger, but not before imposing several “commitments” on the merging companies. Those commitments began with specific legal and structural separation guidelines to ensure future competition. Telia and Sonera were required to operate their fixed and mobile networks as separate subsidiaries in both Sweden and Finland, and grant third parties non-discriminatory network access. Telia was required to divest its mobile network in Finland, and potential buyers were allowed nationwide roaming on commercial terms on Sonera’s mobile network. In addition, the European Commission required that each new company arising from the merger appoint a new, external director.

 

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