ABSTRACT
This chapter analyses the impact of horizontal mergers between neighbouring incumbent operators. It reviews the potential anti-competitive effects. The chapter considers mergers between local operators that have a legal or de facto monopoly on local telecommunication services they have quasi-exclusive control of the local loops and related infrastructure in their home territories. The merger will remove an important source of moderation for access prices in the operators' territories, as well as an important potential or already effective competitor for several telecommunications services. The chapter also considers the competition for cross-border traffic and analyse in detail the role of mutual moderation between the incumbent operators as well as the impact of their merger. The merger will also affect competition for 'multinational' customers that are present in both territories. It will both remove an effective potential competitor and also exacerbate the parties' incentive to degrade access, both on termination and origination, in order to reduce the competitive pressures from new entrants.
