Merger of Tal and Vodafone

The Icelandic Competition Authority received a merger notification on May the 13th 2011 between Eignarhaldsfélagið Fjarskipti ehf. (Vodafone) and IP-Fjarskipti ehf. (Tal). The merger involves Vodafone acquisition og all outstanding shares of Tal.

The Icelandic Competition Authority has concluded that, in a decision published today, the merger of Vodafone and Tal would lead to significantly higher concentrations in oligopolistic communication markets in Iceland which would lead towards duopoly market structure of the various retail markets in the telecommunications sector. Without intervention, the situation would be that only two major parties, Síminn hf. and Vodafone, would offer integrated communications services, as well as several smaller parties would provide services in certain designated areas in the retail market.

Tal is an important rival of both Síminn and Vodafone as the company offers complete solutions in the telecommunications sector in the retail market and has a greater range of service availability than other competitors of Síminn and Vodafone. These three companies are the only one in Iceland that provide full telecommunications services on the retail market. Small competitors in the telecommunications market is dependent on Síminn and Vodafone for wholesale network access in order to provide telecommunications services in competition with Síminn and Vodafone in the retail market. The Competition Authority has therefor also come to the conclution that the merger would significantly reduce the buying power of these smaller competitors at the wholesale level, thereby placing them at a competitive disadvantage.

The Icelandic Competition has rejected the above merger in the decision no. 31/2011.