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Austria: Mobile test case finds users pay more since mergers

 |  March 14, 2016

Austria, seen as a test case for the effects on competition of having fewer mobile phone players, has found users are paying more for some tariffs than they did before a 2013 merger which cut the number of operators from four to three.

The Telecoms regulator RTR and Austria’s competition watchdog said the anti-trust remedies imposed on Hutchison Whampoa’s unit Drei Austria, which bought Orange Austria three years ago, still showed limited effect.

Monday’s findings will be watched by those following Hutchison Whampoa’s progress elsewhere in Europe as it is facing an extensive European Union probe over its planned 10.3 billion pound ($15 billion) purchase of Telefonica’s UK unit.

Hutchison was required by the European Commission to rent out capacities on its network to smaller operators which own no mobile communication infrastructure themselves. But it took nearly two years before the first of these rival service providers actually launched.

“It can be observed that some retail prices are still above the level before the merger,” RTR head Johannes Gungl said at a press conference. “Competition has suffered.”

In the UK case, Hutchison has said it is prepared to sell network capacity and frequencies to counter antitrust any concerns.

The RTR study estimated price increases of between 50 and 90 percent for average Austrian smartphone users in 2013 and 2014.

In a sign that new arrivals in the Austrian market increase competition, prices started to fall last year after German retail giant Aldi’s Austrian arm Hofer and cable group Liberty Global’s UPC Austria introduced mobile services.

The European Commission has signaled a tougher line on telecoms mergers since Hutchison’s Austrian deal and similar takeovers in Ireland and Germany.

Full content: Reuters

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