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Competition Council authorizes "Baltcom" merger with "Izzi"

 RIGA, April 17 - The Competition Council has decided to grant permission for the merger of "Baltcom TV" and "Izzi Com" cable television companies; however, if the companies in the coming months win a tender for the development of terrestrial broadcasting in Latvia, they will have to draw up and submit to the Competition Council a set of conditions that they will observe so as not to hamper competition on the market.

The Competition Council explained to "Nozare.lv" that if the companies are unable to come up with such conditions, the merger permit will be revoked.

After assessment of the merger's impact on the market, the Competition Council concluded that the merger could only have a serious impact on competition if the merged company won a tender for the provision of terrestrial broadcasting services, currently provided by "Lattelecom".

That is why, in order to protect the market and consumers, the Competition Council will only impose restrictions on the merger deal if, as a result of the said tender, the market situation changes significantly.

The Competition Council has concluded that the merger will have an effect on cable television services in Riga, Jekabpils, Ludza and Balvi, whereas its effect on voice telephony, Internet and data transmission markets will be insignificant.

The Competition Council notes alternatives, of which the most important one is terrestrial television, because it is available anywhere in Latvia and is available to any person in areas where cable television is not. Internet TV, provided by "Lattelecom" and, later in the future, by mobile phone operators, is another alternative that seems to have good prospects.

The Competition Council believes that in the short and medium run, the market positions of "Lattelecom" and the merged company will gradually even out, but this will depend on the companies' ability to adapt to the changeable market situation, offer new innovations and better service, as well as on the results of terrestrial broadcasting tender.

"Baltcom TV" and "Izzi" first announced their merger plans in the summer of 2010, but at that time the companies were unable to reach agreement on the certain aspects and the deal was called off.

"Baltcom TV" belongs to "RPAX One S.A.", "Mackonar Impex Limited" and state-owned joint-stock company "Latvijas Valsts radio un televizijas centrs". "Izzi" belongs to Luxembourgian company "Contaq Latvian Cable Holding S.a.r.l.".

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