European Commision approves Nokia PMR deal

The Commission has approved the acquisition of Nokia’s Professional Mobile Radio business by European Aeronautic Defence and Space company.

The European Commission has, under the EU Merger Regulation, approved the proposed acquisition by European Aeronautic Defence and Space company (“EADS”) of Nokia’s Professional Mobile Radio (“PMR”) business. PMR networks are closed, secured wireless radio communication systems used primarily by police and security forces as well as other public services. There are also commercial PMR users such as taxi and truck fleet operators, airports and sporting venues. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

EADS is active in the commercial and military aircraft business and sells telecommunications equipment, space vehicles and weapons as well as other defence and security systems. EADS is also involved in the PMR sector through its proprietary TETRAPOL technology. Nokia, better known for its cellular networks and GSM handsets, also develops and markets PMR systems. Nokia’s PMR offering is based upon the open TETRA standard. EADS does not sell TETRA-based systems and Nokia does not supply TETRAPOL systems.

Despite relatively high combined market shares in the EEA, the Commission’s market investigation (including an analysis of bidding procedures) confirmed that there are sufficient current competitive constraints within the PMR market to preserve effective competition. In particular, the merged entity will contest for future business with current competitors like Motorola and OTE / Finmeccanica amongst others.

The PMR market is a bidding market where customers enjoy a significant degree of buyer power. The acquisition of Nokia’s TETRA-based PMR business is seen as important for EADS’ PMR business as it will enable it to compete more effectively in the PMR market with a TETRA product which has the advantage of being based upon an open standard.

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