M.8792 – T-Mobile NL / Tele2 NL

1. M.8792 – T-Mobile NL / Tele2 NL BijeenkomstVerenigingvoorMededingingsrecht op 27 mei 2019 Annemiek Wilpshaar Deputy Head of Unit C5 – Mergers: IT, Telecom and Media DG Competition, European Commission DISCLAIMER: The views expressed are my own and not necessarily those of the European Commission

2. Previous 4-to-3 Mobile Mergers Austria = [20-30]% • Orange: [10-20]% • Hutchison: [10-20]% Ireland = [40-50]% • Telefonica: [30-40]% • Hutchison: [10-20]% Germany = [30-40]% • Telefonica: [10-20]% • E-Plus: [20-30]% Denmark = [40-50]% • TeliaSonera: [20-30]% • Telenor: [10-20]% UK = [40-50]% • Telefonica: [30-40]% • Hutchison: [10-20]% Italy = [30-40]% • Vimpelcom: [20-30]% • Hutchison: [10-20]%

3. Previous consolidation in NL Mobile + Mobile 2005 KPN + Telfort 2012 Reserved spectrum for new entrant 2007 T-Mobile + Orange 2018 T-Mobile + Tele2 NL • Fixed + Fixed • 2014 - Liberty Global + Ziggo • 2018 - Liberty Global + Ziggo approval readopted • Fixed + Mobile • 2016 - Liberty Global/Ziggo + Vodafone / JV • Remedy was divestment of Vodafone fixed assets to T-Mobile

4. The Transaction • Deutsche Telekom group • Long standing MNO player • High quality 2G / 3G / 4G network • Active on the wholesale market • Limited fixed network • Tele2 AB group • MNO entry facilitated by reserved spectrum in 2012 • 4G network only: • Network sharing agreement with T-Mobile • 2G/3G national roaming agreement with T-Mobile • Limited fixed network Claimed deal rationale – Creation of strong third player able to break the KPN and VodafoneZiggo duopoly on the FMC market and invest in new technologies

5. The procedure Phase II decision adopted Advisory Committee Phase II deadline Art 6(1)(c) Decision Oral hearing SO adoption Notification 20 WD ext. 10WD STC 14 Nov 2018 27 Nov 2018 8 Oct 2018 2 May 2018 12 Jun 2018 12 Sep 2018 30 Nov 2018

6. Market definition • Market for the retail supply of mobile telecommunications services • Including mobile sold as part of a fixed-mobile bundle • Excluding OTT apps, WiFiand OTT apps over WiFi • Private and business customers • Postpaid and prepaid customers • Territory of the Netherlands

7. Dutch retail mobile market • 4 mobile network operators • Approx. 35 different mobile virtual network operators

8. Competitive assessment • Non-coordinated horizontal effects • “Gap case” > elimination of important competitive constraints (ICC) resulting in a SIEC? • Key factors taken into account in the analysis: • Whether the parties are and will remain important competitive force (ICF)? • The extent to which the parties are and will remain close competitors • Competitive constraints which will be exercised post-Transaction by competitors

9. TMNL's competitive strength • Aggressive player • Disruptive launch of an unlimited data tariff • Best quality network in the Netherlands • No evidence to suggest that this would change absent the transaction • Conclusion: Important competitor

10. Tele2 NL's competitive strength • Limited market share • Pre-transaction – based on detailed review of internal documents and other evidence: • Moderate performance despite commercial efforts • Network limitations (spectrum and sites) • Absent the transaction (counterfactual) – based on detailed review of financial and network plans: • Tele2 NL will continue to flounder • Network gap withcompetitorswouldkeepincreasing • Conclusion: Not an important competitive force

11. Closeness of competition • Parties are currently close competitors • Degree of closeness: • Conclusion essentially relying on documentary evidence • Price: meaningfully comparing prices proved difficult; no material differences found between MNOs • Network: increasing gap in network performance between TMNL and Tele2 NL (capacity and quality) • Quantitative evidence: diversion ratios do not strongly indicate that the Parties are particularly close

12. Other players • MNOs • KPN: Important competitor • VodafoneZiggo: Important competitor • MVNOs: Limited competitive constraint • Heterogeneous group of different types of MVNOs • Ability to compete already limited pre-Transaction • Dependence in short and long term on MNO & MNO's network regarding main parameters of competition

13. Quantitative assessment • Calibrated merger simulation on the private segment • Main inputs: diversion ratios across operators as well as measures of prices, margins and volumes • MNP data versus Customer Survey (tomeasurecustomers' firstandsecondchoiceofoperatorat time oftheir last purchase) • Predicted price effects are limited

14. Efficiencies 1. Verifiable 2. Merger specific 3. Benefit to consumers Cumulative criteria: Limited efficiencies accepted: • Internalisation of Tele2 NL's costs related to the national roaming agreement with TMNL Criteria notassessed for: • FMC • Dynamic competition • Improved cash flow position leading to more investment • Fixed-mobilesubstitutionandcombinationofspectrum • Fixed costefficiencies, other variable costefficiencies

15. Third party complaints • Wholesalemarketcomplaintrejected • Abilitytoforeclose • Incentive toforeclose • But, deterioration of wholesale access terms would not have a significant impact on competition • Distributors complaintrejected • Spectrumasymmetrycomplaintrejected

16. Conclusion • No non-coordinated horizontal effects on retail market • Limited combinedmarketposition (closeto 25%) • Small increment (closeto 5%) • Uncertaintyabout Tele2 NL'sfuture • Nocoordinatedeffects on retailmarket • Asymmetrybetweenmergedentity, KPN andVodafoneZiggo • Wholesalemarket not affected  NoSIEC