Review: In the summer of 2019, the EU Commission approved the merger decision between Vodafone and Unitymedia. By its own admission, the Cologne network operator NetCologne voiced criticism at the time. NetCologne has filed a lawsuit with the General Court of the European Union for distortion of competition. Additionally, NetCologne sees the federal government’s broadband target at risk due to a lack of competition going forward.
But NetCologne is not the only competitor opposing the merger. As reported by the Rheinische Post, the Berlin cable network operator Tele Columbus and Deutsche Telekom have also filed the corresponding lawsuits.
NetCologne sees further fiber optic expansion in Germany at risk from the merger. Only in cities such as Hamburg, Cologne and Munich has there been a significant expansion of fiber optic networks so far. According to the Cologne firm, the main reason for this was free competition between national providers and regional telecommunications companies. “Until now, fair competition has been the guarantee of innovation, consumer-friendly pricing and rapid expansion of fiber optics,” explains NetCologne Managing Director Timo von Lepel. “However, as a result of the merger of Vodafone and Unitymedia, another national competition has formed alongside Telekom. From our point of view, the previous competition is in danger. “
These 3 reasons speak of NetCologne against the acquisition of Unitymedia
The problems can be seen in three areas: this affects the area of television, the market for packaged goods and the expansion of gigabit.
NetCologne sees distortions in the television market because Vodafone is demanding feed rates from television stations to feed its cable network. There is no comparable regulation for other network operators like NetCologne.
In the packaged goods market, NetCologne sees the risk of cross-subsidies within the Vodafone / Unitymedia group. “By cross-subsidizing the fixed cable network throughout Germany, Vodafone / Unitymedia is also able to offer its customers significantly cheaper bundled fixed line, Internet, TV and mobile communications products in areas previously only served by Unitymedia” . Although NetCologne has its own fiber optic network in Cologne and the region, “to complete our product portfolio with mobile communications, we still have to rely on preliminary services from our competitors,” said the provider.
NetCologne’s third problem area is gigabit expansion. The federal government’s broadband goal is in jeopardy due to lack of competition in the future. It plans to have gigabit networks nationwide by 2025. “That can only be achieved with fast fiber optic networks, as NetCologne is already being built successfully in the Cologne / Bonn and Aachen region,” says Timo von Lepel. “That is why we continue to advocate for fair competition at all levels with our complaint to the European Court.”
Merger only subject to conditions
The merger of Vodafone and Unitymedia was only possible under certain conditions. For example, Vodafone has to grant cable network access to another company in order to offer Internet products. That should be O2. But there are no offers yet.
Vodafone has achieved at least one thing with its current pricing campaign: the price of gigabit lines has been greatly reduced. In the future, customers will expect high-speed lines to cost no more than 50 euros. Most customers probably don’t care if you’re switching over cheap cable connections or expensive real fiber optic lines.