EUROPEAN COMMISSION
PRESS RELEASE
Brussels, 15 April 2014
Mergers: Commission approves acquisition
Central Europe by Deutsche Telekom
of
GTS
The European Commission has cleared under the EU Merger Regulation the proposed
acquisition of telecommunications company GTS Central Europe ("GTS") of Luxembourg
by rival Deutsche Telekom ("DT") of Germany. The Commission concluded that the
transaction would not raise competition concerns, because the merged entity would
continue to face strong competition after the merger and customers would still have
sufficient alternative suppliers in all markets affected.
The Commission examined the effects of the merger on competition in several markets in
Hungary, Romania, the Czech Republic and Poland, where the parties have overlapping
activities or vertical links. GTS' Slovak business is not concerned by this transaction.
The activities of the two companies overlap in the markets for wholesale leased lines and
retail business connectivity in Hungary and Romania as well as in the markets for
domestic call transit services in the Czech Republic and Hungary. The Commission
concluded that the acquisition would not raise any competition concerns in these markets.
The Commission found, in particular, that other strong players, such as Invitel and UPC in
Hungary, Telefonica and Dial Telecom in the Czech Republic and Orange and Vodafone in
Romania, will continue to compete with the merged entity in these markets.
The Commission also assessed the impact of the transaction on a large number of markets
where the merging companies are active at different levels of the supply chain. More
specifically, the Commission focused on the following markets:
 The upstream market for the wholesale provision of leased lines and the downstream
markets for (a) retail business connectivity services and (b) retail supply of mobile
telecommunication services, in Hungary and Romania. The Commission's investigation
confirmed that customers in the downstream markets will be able to source from
alternative suppliers or to partially switch to alternative inputs (such as Ethernet
solutions, Internet Protocol-Virtual Private Network services or dark fibre). The merged
entity will also be unable to hinder or shut out its competitors in the wholesale leased
lines market because of its limited presence and the existence of several alternative
customers in the two downstream markets.
IP/14/450
 The upstream market for the wholesale provision of domestic call transit services on
fixed networks and the downstream markets for (a) the retail supply of fixed voice
services in Hungary and (b) the retail supply of mobile telecommunication services to
end customers in Hungary and the Czech Republic. Domestic call transit services are
used to connect two telephony networks which do not have direct interconnection
agreements so that callers on one network can reach numbers hosted on a different
network. The Commission's investigation showed that customers in the downstream
markets will be able to source from alternative suppliers. Moreover, direct
interconnection agreements among network operators, which are regulated, are a
partial substitute for domestic call transit services. Regulation grants the right to every
telephony operator to directly interconnect to any competitor's network at a capped
price. Finally, the merged entity will not be able to hinder or shut out competitors in the
upstream market because of its limited demand of such upstream input and the
existence of several alternative customers in the downstream markets.
The Commission therefore concluded that the transaction would not raise any competition
concerns in these markets.
The transaction was notified to the Commission on 11 March 2014.
Companies and products
Deutsche Telekom is active internationally in the telecommunications sector and has as its
core business the provision of fixed and mobile telecommunications as well as internet and
internet protocol television services to consumers mainly in Europe.
GTS Central Europe is active in the telecommunications sector and especially in the
provision of telecommunications services and tailor-made information and communication
technology services to business, carrier and government customers in Poland, the Czech
Republic, Hungary, Romania and Slovakia.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a
turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent
concentrations that would significantly impede effective competition in the EEA or any
substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after
a routine review. From the moment a transaction is notified, the Commission generally has a
total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth
investigation (Phase II).
More information will be available on the competition website, in the Commission's public case
register under the case number M.7109.
Contacts :
Antoine Colombani (+32 2 297 45 13, Twitter: @ECspokesAntoine )
Marisa Gonzalez Iglesias (+32 2 295 19 25)
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