Economic analysis of merger in Hong Kong mobile telephony sector – May 2014

competition-economics||116competition-regulation-and-business||0mergers||27regulatory-economics||116telecom-and-media||57
Sector:Competition Economics | Competition, Regulation and Business | Mergers | Regulatory economics | Telecom and media
Client:Hong Kong Communications Authority
Published: 05 May, 2014
Document type: 
Tagged: quantitative analysis

This final report considers the likely competition effects in Hong Kong telecommunications markets of the proposed acquisition of CSL New World Mobility Limited (CSLNWM) by HKT Limited. We assess whether there is likely to be a substantial lessening of competition (SLC) as a result of the merger; whether there are benefits to the public that are likely to outweigh any detriment arising from a substantial lessening of competition; and whether there are any remedies that could address any substantial lessening of competition.

We conclude that the merger gives rise to a substantial lessening of competition in the retail market for mobile telecommunication services and wholesale market for network access for MVNOs. Remedies are proposed in order to address concerns of unilateral effects, to reduce excessive network capacity concentration, and to preserve network access conditions for MVNOs. The proposed remedies are necessary to eliminate or avoid the likely substantial lessening of competition effects identified in the two markets.