Portugal’s competition authority has ruled that Vodafone Portugal’s proposed acquisition of Cabonitel, including Nowo Communications, would likely create “significant impediments” to competition.
Following an in-depth investigation, the AdC ruled that the acquisition should not go ahead. The Authority was concerned that Vodafone would gain an increase in market power and barriers to entry for potential competitors would be reenforced.
It identified similar offers and price structures from MEO, NOS, and Vodafone, while the smaller Nowo was able to exert some price pressure on its larger rivals. There was concern that an acqusitin might lead to an increase in prices for Nowo of up to 55% for standalone mobile services.
Vodafone had offered to sell new radio spectrum, reserved to new entrants and acquired by Nowo, to Digi and to provide the new entrant with a wholesale offer on Vodafone’s fiber optic network.
The argument was that Digi would ‘replace’ Nowo as a challenger, but the Authority found the concessions to be insufficient and only addressed the issue of entry barriers.
