German regional operator NetCologne is taking legal action challenging EU approval of Vodafone’s acquisition of Unitymedia from Liberty Global. German press also reports that Deutsche Telekom and Tele Columbus have formally objected to the approval.
The operators believe the deal distorted competition and threatens the German governments broadband access targets. Timo von Lepel, head of NetCologne, said that fibre penetration in cities including Hamburg, Cologne and Munich had been driven by regional operators that were able to compete with Telekom, but that the creation of another national player put this at risk. He also said that the expansion of the Vodafone network to all 16 Federal states also created a clear imbalance in the TV market where “market power is concentrated in one company” that charged “enormous feed-in fees”.
He complains that the expanded Vodafone could now offer cheaper bundled products including mobile access through cross-subsidisation to areas previously only served by Unitymedia in the fixed-access business.
According to a report by Medienkorrespondenz on February 16th, Deutsche Telekom and Tele Columbus have both complained that the EU’s approval of the merger of Vodafone and Unitymedia failed to take sufficient account of the competitive disadvantages arising the television market from the deal.
Deutsche Telekom said that the merger effectively closed off the opportunity to compete in the housing association market, while Tele Columbus also said the EC had made procedural errors during its investigation.