Vodafone Portugal’s ambition to acquire Nowo Communications has faced a major setback. The country’s competition authority, Autoridade da Concorrência (AdC), formally prohibited the deal, citing “significant impediments to competition and consumer harm.”
Discussions about this acquisition began back in October 2022. Since then, challenges have beset Vodafone’s efforts. The AdC expressed concerns about Portugal’s existing telecommunications market structure, characterized by high concentration and limited customer mobility. The market’s top three operators—Meo, NOS, and Vodafone—reinforce these barriers through customer loyalty programs and bundled offers, further limiting competition.
The AdC emphasized Nowo’s role as a crucial competitive player. “Nowo exerts considerable competitive pressure on the other market operators. The merger would lead to significant price increases,” stated the AdC. The agency projected potential price hikes of up to 55% for Nowo’s mobile products, with single-digit increases from Vodafone.
Adding complexity to the acquisition, Nowo had acquired 5G spectrum reserved for new market entrants. This spectrum allocation aimed to foster competition, and Vodafone, being an established operator, did not fit this criterion. In response, Vodafone proposed selling the spectrum to Digi, a new carrier, in an attempt to alleviate the regulator’s concerns.
Despite these efforts, the AdC remained unconvinced. The regulator’s decision underscores the importance of safeguarding competitive dynamics and consumer interests in Portugal’s telecommunications sector.
