The statement above is our interpretation of the motive behind the launch by the KPN group in one of its markets of “truly mobile” smartphone plans with enough mobile internet gigabytes to “live completely mobile”.

Public release summary

Before the planned merger a Danish operator was selling in Denmark a 4G LTE smartphone plan with 100 gigabytes for €39. Ahead of the planned merger the operator slashed the gigabytes down to 20 while keeping the price the same. After the merger was blocked the operator doubled the maximum gigabytes on its smartphone plans by launching a plan that packs 40 gigabytes.

- Ahead of its planned merger with Wind in Italy Hutchison Three has halved the gigabytes in its flagship 4G LTE smartphone mobile internet access plan and launched its own zero-rated (unlimited gigabytes at €0/GB) film store.

Ahead of its planned merger with Telefonica O2 in the UK Hutchison Three has more than doubled (+113%) the price of its flagship 4G LTE smartphone plan.

There are substantial empirical market evidences supporting the notion that close to half of EU’s mobile markets exhibit tight oligopoly non- or sub-competitive market outcomes.

Triggered by the planned mergers in the UK, Commissioner Vestager’s assertion that “In fact, infrastructure investment can be stimulated by competition” and by the court challenge filed by Airdata AG against the Commission’s unlawful approval of Telefonica E-Plus German merger we take a closer look at effective competition and in particular 4G LTE mobile internet access (smartphone plan) prices and hotspot/tethering restrictions in the consolidated German protected oligopoly, UK and France.

In this premium research note we present the 10 gigabyte basket EU28 & OECD country and operator ranking for 4G LTE unlimited (>1,000) minute & SMS smartphone plans that include hotspot/tethering functionality for the entire volume. MVNOs are not competitive!

4G LTE smartphone plans with 100 or unlimited gigabyte volume are promoted by European mobile operators as the ultimate packages for connecting computers and tablets and streaming movies while at home. Affordably priced 100, 200, 500 or unlimited gigabyte 4G LTE data only home broadband plans - Cheaper than cable.

Public release summary

Smartphone tariff price competitiveness snapshots between December 2012 and May 2015. Before the price hikes that followed approval of Hutchison’s and Orange’s merger Austria used to rank as the country in EU28 with the second lowest 4 gigabyte smartphone tariff basket price. Now prices doubled and Austria has fallen to the fourteenth place.

In April 2015 Drillisch launched a new portfolio of smartphone tariffs in many of its retails sub-brands.

While in the neighbouring Swedish 4 operator competitive market gigabyte allowances doubled for same prices (40, 50 and 100 gigabyte smartphone plans are now available and on some Swedish networks 30% of the residential smartphone customers are now on the 20, 50 or 100 gigabyte plans) in Denmark two operators started moving in the opposite direction.

Telefonica published (link here) on their public policy blog a review of the Digital Fuel Monitor methodology. Telefonica’s critical review of the Digital Fuel Monitor methodology is based on a review (link here) conducted by a consulting firm called Solchaga Recio & Associates (SR). In this 2-pager research note we respond to Telefonica's criticism. The note also includes the copy of our first reactions posted under the Telefonica blog post.
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Northern Europeans get 50 times more gigabyte allowance on mass affordable tariff plans than consumers in non-competitive EU member states such as Greece

Three UK has now more than doubled the price of its flagship SIM-only smartphone plan. Hutchison appears confident that price increases will not deter the European Commission from approving its planned acquisition of o2 in the UK with an ineffective upfront ‘throughput≠capacity’ based MVNO remedy.

In its report ‘Assessing the case for in-country mobile consolidation’, prepared for the GSMA, Frontier Economics claimed “...that there is no evidence that prices increased following the merger” in Austria. According to Frontier’s dubious methodology unit prices fall even when consumers are asked to pay more Euros every month to purchase the same amount of goods. The fact is that before the merger, in December 2012, Austrian consumers paid €11 to purchase a smartphone plan with at least 1,000 minutes/SMS and 2 gigabytes. By February 2015 the price has doubled to €22.

In February 2015 EE increased mobile internet smartphone plan prices by 27%.

In 4 to 3 consolidated markets and in a market where consolidation is on the making the average price of the 5 gigabyte mobile internet access basket rose by up to 56% while the lowest available price rose by up to 68%. In markets that went from 3 to 4 operators and in a 4-player market where consolidation was blocked the average price of the 5 gigabyte mobile internet access basket fell by up to 37% while the lowest available price fell by up to 40%.

Downlad Rewheel's presentation » here

Meanwhile Telefonica, post merger, also raised mobile internet smartphone plan prices by double digit percentage.

In this two-part guest blog for the World Wide Web Foundation, Antonios Drossos of Rewheel discusses the potential threats of price discrimination. Download as PDF: » here

This is the first empirical evidence of the pro-competitive benefits of real net neutrality rules that ban price discrimination (zero-rating) – it leads to lower internet usage prices and higher volume caps!

Unlike all other vertically price discriminated telco mobile TV and film store video services Telenor’s service is not zero-rated but the price is massively discounted. Telenor charges 10 times less per Gigabyte when consumers watch its own internet video service over its mobile network compared to the price it charges consumers for open mobile internet access!

This is the first letter by leading scholars that unequivocally supports a bright-line ban on all forms of paid prioritization (including zero-rating).

"A decision relating to the future of mobile television content"

On the 27th January 2015 ACM, The Netherlands Authority for Consumers and Markets has fined Vodafone for violating the Dutch net neutrality law.

Slovenian regulator has found that zero-rating internet apps is violating the non-discrimination clause of the Slovenian national net neutrality law.

The suggestion by the Presidency of the EU Council to omit from the scope of net neutrality regulation the potentially anti-competitive practice of price discrimination (e.g. zero-rating) and allow instead Member State legislative discretion will balkanise internet access and prevent the creation of a European Digital Single Market.

On closer examination, the bill is so narrowly written that it fails to adequately protect users, innovators, and speakers against blocking, discrimination, and access fees. Citing Digital Fuel Monitor research.

Although the author referred to its work as “analytical” the study made no reference whatsoever to the most important and wide spread economic net neutrality violation – application based price discrimination such as zero-rating.

Net neutrality and why it matters (or not) for the digital economy. Based on Rewheel quotes and Digital Fuel Monitor analysis.

The Commission was well aware at the time it approved the Austrian merger (December 2012) that Hutchison’s Final Commitments (MVNO wholesale access) could not remove the competition concerns entirely.