The Jersey Competition Regulatory Authority has launched a public consultation on the proposed acquisition of Jersey Airtel Limited by Sure (Guernsey) Limited.
The Authority was notified by the parties of their intention in November last year and in December determined that the proposed transaction may give rise to a substantial lessening of competition in the telecoms market in Jersey.
Specifically, in its First Review the Authority identified three mechanisms through which the Proposed Transaction may lead to a substantial lessening of competition in the retail mobile market:
- By removing competitive constraints offered by Airtel, the Proposed Transaction will allow the merged entity and JT (Jersey) Limited (JT) to unilaterally raise prices or reduce quality (non-coordinated effects);
- The Proposed Transaction may mean that the merged entity and JT will find it easier to coordinate their behaviour to increase prices, reduce investment or reduce quality (coordinated effects);
- The merged entity will have a significant advantage in spectrum holdings (a key input to mobile services) which could lead to increases in mobile prices (advantage in spectrum holding).
In accordance with its published Guidelines, where an application may lead to refusal, or approval with conditions, the Authority decided to refer the Proposed Transaction to a Second Detailed Review, during which Sure and Airtel made further submissions to support their application.
Sure offered a number of conditions to mitigate the potential harm to competition from the Proposed Transaction, which will now be ‘tested’ through the Consultation.
In particular, the Authority is seeking feedback from existing or potential new competitors, customers groups, and business organisations who may be directly impacted to assist it in its decision whether to refuse the application or approve it with the conditions proposed by Sure.
Sarah Price (pictured), Chief Operating Officer at the Authority said: “Open and vigorous competition is good for consumers because it can result in lower prices, new products of a better quality and more choice. It is also good for fair-dealing businesses, which flourish when markets are competitive.
“Mergers and acquisitions can bring many benefits to an economy, introducing new management skills and investment, and in many cases, improvements in efficiency through economies of scope and scale. However, they may also lessen competition and it is therefore appropriate that we thoroughly investigate and consider all of the factors, including the market before merger and the likely impact post-merger.
“In this case we believe it is imperative to gather as much feedback as possible so that our final decision is balanced, informed and in the interests of all stakeholders, not least customers of Airtel and Sure.”
The Authority invites written representations on the proposed undertakings from any person or persons who wish to comment. Representations should reach the Authority by 16th June 2023 and should be emailed here.
