Commission, May 29, 2013, No M.6690

I. THE PARTIES

(1) Syniverse is a global provider of technology services to telecommunications companies. Its main services include data clearing (DC) and financial clearing (FC) for roaming, SMS and number portability solutions, network signalling solutions, Internet protocol ('IP') network services, voice and data roaming facilitation and various other technology solutions for telecommunications companies. Syniverse is based in Tampa (USA) and ultimately controlled by The Carlyle investment group. It serves its customers from its data centres in the United States, Germany and India.

(2) Mach is also a global provider of technology services to telecommunications companies. Its main services include DC and FC services, SMS solutions, fraud management and revenue protection services, business intelligence and content billing solutions. Mach is based in Luxembourg and currently controlled by Warburg Pincus, a global private equity firm. It services its customers through platform infrastructures hosted in Denmark and India.

II. THE OPERATION

(3) On 16 November 2012, the Commission received a notification of a proposed concentration pursuant to Article 4 of Regulation (EC) No 139/2004 ('the Merger Regulation') by which the undertaking Syniverse Holdings, Inc. ('Syniverse' or the 'notifying party') acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole control of the whole of the undertaking WP Roaming III Sàrl ('Mach'), with the exception of Evenex ApS and its wholly owned subsidiary Evenex AS (the 'Evenex Companies'), by way of purchase of shares. The proposed concentration was notified to the Commission following a referral pursuant to Article 4(5) of the Merger Regulation.

III. SUMMARY

(4) After preliminary examination of the notification, the Commission adopted a decision on 20 December 2012 (the 'decision opening the proceedings'), concluding that the operation falls within the scope of the Merger Regulation and raises serious doubts as to its compatibility with the internal market and the functioning of the EEA Agreement and initiated proceedings pursuant to Article 6(1)(c) of the Merger Regulation.

(5) On 5 March 2013, a statement of objections was sent to Syniverse pursuant to Article 18 of the Merger Regulation. Syniverse replied to the statement of objections on 19 March 2013.

(6) On 11 March 2013, Syniverse offered commitments with a view to rendering the proposed concentration compatible with the internal market. These commitments were modified on 26 March 2013 and the final formal commitments were submitted to the Commission on 19 April 2013 (the 'final commitments').

(7) The Advisory Committee discussed the draft decision on 13 May 2013 and issued a favourable opinion.

IV. EXPLANATORY MEMORANDUM

(8) The proposed concentration concerns the combination of two leading providers of technologies and services related to roaming. These services are provided to two main categories of customers: mobile network operators ('MNOs') and mobile virtual network operators ('MVNOs').

(9) Roaming occurs when a consumer connects his or her mobile device to another mobile network when travelling abroad. That user can use the visited network to receive and place calls and SMSs and to download and transmit data such as Internet streams, photos and videos. Roaming is facilitated by MNOs, which conclude bilateral agreements with other MNOs, as a result of which their users can roam on the partner's mobile network.

(10) The parties are active on the upstream markets where they provide crucial roaming technologies and services to MNOs. In particular, the parties are the main providers of roaming DC services, near real-time roaming data exchange (NRTRDE) services and FC services. In addition to these services, the parties provide other closely related services such as roaming hub services, bgusiness intelligence solutions as well as A2P and P2P SMS services.

(11) As regards MNOs, it is possible to distinguish different types of customers according to their size. Indeed it is possible to identify large MNOs (also referred by market participants as 'Tier 1' MNOs), medium MNOs ('Tier 2' MNOs) and small MNOs ('Tier 3' MNOs) (2). Tier 1 MNOs would notably include Deutsche Telekom, Orange, Vodafone and Telefónica.

A. THE RELEVANT PRODUCT MARKETS

Market for data clearing services

(12) The Commission concludes, in line with its previous findings (3), that the relevant product market for the purpose of the assessment of the impact of the proposed concentration is the market for GSM roaming outsourced DC services.

Market for NRTRDE

(13) The Commission concludes that the relevant product market for the purpose of the assessment of the impact of the proposed concentration is the market for outsourced NRTRDE services, but it can be left open whether it is part of a broader market encompassing DC services.

Market for financial clearing services

(14) For the purpose of the assessment of the impact of the proposed concentration, the Commission concludes that the relevant product market can be left open since the notified concentration does not give raise to competition concerns under any possible market definition.

Market for A2P and P2P services

(15) The Commission considers that these two activities constitute separate product markets and that there is no need to take a conclusive view on the product market definition considering that there is no competitive concern in any possible product market definition.

Market for roaming hub services

(16) The Commission considers that there is no need to take a conclusive view on the product market definition considering that there is no competitive concern under any possible product market definition.

B. THE RELEVANT GEOGRAPHIC MARKETS

Market for data clearing services

(17) The market investigation provides support to the notifying party's claim contained in the Form CO that the geographic scope of the DC market is worldwide. On the demand-side, the overwhelming majority of the responding customers confirm that they send out their requests for proposals for DC on a worldwide basis (4). However, some customers indicate that they would only consider contracting with data clearing houses (DCHs) with a physical presence in the EEA (5).

(18) With market shares of almost [90-100] % (by operator count (6)), the market position of the combined entity would be similar at both global and EEA-wide levels. It follows that the results of the analysis as to the compatibility of the proposed concentration with the internal market are the same under both alternative geographic market definitions.

(19) Therefore, the Commission concludes that for the purpose of the assessment of the impact of the proposed concentration the exact geographic scope of the DC market can be left open.

Market for NRTRDE

(20) Irrespective of a worldwide or EEA-wide market, the position of the merged entity as NRTRDE provider would not be significantly different. At both the worldwide and EEA-wide levels, the merged entity's market share would be close to [90-100] % (by operator count (7)). At both levels, only smaller competitors would remain after the proposed transaction. It follows that the results of the analysis as to the compatibility of the proposed transaction with the internal market are the same under both alternative geographic market definitions. The exact geographic scope of the NRTRDE market can therefore be left open at this stage.

Market for financial flearing services

(21) At the worldwide level, the merged entity's market share would be slightly over [80-90] %, whereas at the EEA-level, it would be almost [70-80] % (both by operator count) (8). At both market levels, smaller competitors would remain.

(22) Likewise, if considering in-house FC as part of the relevant market, affected markets would arise both at EEA and worldwide level, although the market shares would be lower (respectively [30-40] % in the EEA market and [60-70] % at worldwide level) (9). However, also in this case the competitive assessment would be the same regardless of the exact geographic market definition.

(23) Therefore, the Commission concludes that for the purpose of the assessment of the impact of the proposed concentration the exact geographic market definition can be left open.

Market for A2P and P2P services

(24) The market investigation indicates that the market could have a larger scope and possibly be a worldwide market. In any event, the geographic market definition can be left open.

Market for roaming hub services

(25) The Commission concludes that the geographic market definition can be left open, since there is no competition concern under any possible geographic market definition.

Other related markets

(26) In addition to areas where the parties have overlapping activities, they are active in a number of related areas where there is no horizontal overlap. This includes other roaming services (such as hub provision and CIBER licence services), other messaging services (such as MMS P2P messaging, miscellaneous messaging, online photograph storage applications and video messaging), certain business intelligence and analytics services, miscellaneous services (such as direct operator billing and turnkey solutions) and network services (such as network and number portability solutions).

(27) The above activities belong to separate markets from DC, NRTRDE and FC services. None of these activities are horizontally or vertically affected markets for the purpose of the Commission's assessment.

(28) The Commission considers that the exact definition of all related neighbouring markets can be left open, as any conglomerate effects that might arise on the basis of this transaction will be remedied through the remedies offered by the parties (as set out below in Section VI).

C. COMPETITIVE ASSESSMENT

The competitive landscape

(29) The markets for the provision of the services described above are characterised by the presence of a few specialist providers which tend to offer the full suite of roaming services and technologies to MNOs.

(30) The main providers of the services other than the parties are Comfone, Nextgen, TNS, ARCH and EDCH.

1. Horizontal unilateral effects in the DC market

Introduction

(31) The Commission's assessment shows that: (1) the parties have very high combined market shares maintained consecutively through several years; (2) the merging firms compete intensely with each other, with a strong offering not only in DC services but also a comprehensive suite of other products/services; (3) it is unlikely that competitors will sufficiently challenge the parties' position post-transaction; (4) the proposed transaction has as its likely effect the decrease of quality and/or increase in prices for DC services; (5) customers do not possess sufficient countervailing buyer power; (6) entry of a new competitor is not likely due to barriers to entry.

The merged entity would have very large market share

(32) Currently Syniverse and Mach are by far the largest DC service providers both globally and in the EEA. Each of them controls around 40-50 % of the market, irrespective of the geographic scope of the market. After the proposed concentration, the merged entity's market share would reach near monopoly levels: [80-90] % both worldwide and in the EEA.

(33) The next largest competitor in the EEA, Comfone, has a market share of around [0-5] % on the global level and [10-20] % in the EEA. EDCH has a small worldwide market share of [5-10] %, and only a minor presence in the EEA (with a [0-5] % market share). Finally, ARCH and TNS have no presence in the EEA and only a minor presence globally.

The merging firms are each other's closest competitors

(34) Based on the market investigation, the Commission considers that Syniverse and Mach currently compete intensely with each other in the DC market. In contrast, other providers are either seen as remote competitors or not even considered at all. This is so in relation to large Tier 1 MNOs, but also in relation to most of the Tier 2 and 3 MNOs that DC providers need to serve in parallel. This conclusion applies irrespective of whether the geographic scope of the market is worldwide or EEA-wide.

Customers' possibility to switch supplier

(35) The Commission considers that customers, in particular Tier 1 MNOs but also smaller MNOs, would have limited possibility of switching to smaller alternative suppliers because these suppliers are unlikely to provide the required reliability of services. In addition, MNOs would likely face substantial risks and costs when switching to smaller DC providers. This conclusion applies irrespective of whether the geographic scope of the market is worldwide or EEA-wide.

Competitors' limited ability to increase supply if prices increase and/or quality decreases

(36) Past experience in the DC market shows that organic growth on the market tends to be slow. The market investigation revealed that in order to expand DC providers need to scale up resources in terms of hardware, software, personnel as well as contract portfolio.

(37) The Commission concludes that it is unlikely that competitors would increase their supplies to an extent that they can replicate the constraint that Mach is exerting on Syniverse today. This conclusion applies irrespective of whether the geographic scope of the market is worldwide or EEA-wide.

Likely effects of the merger: decrease of quality and/or increase of prices for DC services

(38) The market investigation revealed that customers are overall concerned about the impact of the proposed merger on the price and quality of DC services.

(39) The Commission concludes that the merger results in the creation of a dominant position and that, as the result of the merger, the parties are likely to adversely influence prices and/or quality for DC services without risking losing their customers. This conclusion applies irrespective of whether the geographic scope of the market is worldwide or EEA-wide.

Countervailing buyer power

(40) The results of the market investigation do not confirm that customers would be able to exert sufficient countervailing buyer power to offset the likely adverse effects of the proposed concentration. With the proposed merger, the ability of customers to play these main competitors off against each other will disappear.

Other countervailing factor: entry

(41) The market investigation revealed that any additional new entrant would have to overcome a number of barriers to expansion. An entrant would not only need to launch DC operations to start providing DC services to its first customers, but also enter across different services in order to compete with the merged entity to the same extent as Mach competes with Syniverse today.

(42) In conclusion, the Commission considers that sufficient, timely entry of new DC providers is unlikely. This conclusion applies irrespective of whether the geographic scope of the market is worldwide or EEA-wide.

Conclusions

(43) The Commission considers that the proposed concentration would significantly impede effective competition on the market for GSM DC for roaming, irrespective of whether the geographic scope of the market is worldwide or EEA-wide.

2. Horizontal non-coordinated effects in the NRTRDE market

Introduction

(44) The Commission has left open whether there is a separate market for NRTRDE or a market that encompasses NRTRDE and the data feeds from the DC activity that are used for fraud management and revenue assurance purposes. The Commission assesses the horizontal effects of the proposed concentration in NRTRDE separately for the narrower NRTRDE market and the possible broader market that encompasses NRTRDE and the data feeds from the DC activity.

(45) The Commission's assessment shows that: (1) the parties have very large combined market share and post-merger level of concentration; (2) the parties are each other's closest competitors in NRTRDE and the proposed concentration would remove Syniverse's strongest and close competitor; (3) customers would face barriers to switch to smaller alternative NRTRDE providers; (4) smaller NRTRDE providers are unlikely to increase supplies to a level where they can replace the constraint that Mach currently exerts on Syniverse, whilst there are no indications that (5) customers could exert countervailing buyer power and (6) there would be timely and sufficient entry that would countervail the expected negative effects of the proposed concentration on the NRTRDE market.

Market shares

(46) The parties' combined market share for NRTRDE would be close to [90-100] %. The increment brought about by the merger would be [30-40] %. Each of the remaining competitors would not reach a 10 % market share. At the EEA-wide level in 2012, the merged entity would have a market share of over [90-100] %, whilst the merger increment would be [40-50] %. In the EEA, only Comfone would remain as a competitor with a market share of [5-10] %. Also, the post-merger level of concentration in the NRTRDE market would be very high.

Horizontal non-coordinated effects in the narrower market for NRTDE services The parties are each other's closest competitors

(47) Syniverse and Mach are widely viewed by customers and competitors as the two main providers of NRTRDE services. The parties' customer information as well as the switching data they have provided confirm that they are the only providers that offer their services to the full range of large, mid-sized and small MNOs.

(48) The Commission's market investigation confirms that the smaller competitors to the parties exert a far less significant constraint on the parties than the parties exert on each other in the bidding process for NRTRDE services.

(49) The Commission considers that Syniverse and Mach currently compete head-to-head in the NRTRDE market and that Comfone and other smaller competitors do not pose a constraint that is comparable to the constraint that the parties exert on each other.

Customers have limited possibilities to switch to smaller NRTRDE providers

(50) The investigation confirms that the proposed concentration would remove Mach as the only other credible supply source for NRTRDE and that customers would face barriers to switch to alternative suppliers. Virtually none of the parties' top customers have considered asking for bids from the smaller NRTRDE providers. The Commission considers that this reflects a general reluctance of these customers to switch to these smaller providers.

Smaller competitors are unlikely to increase supplies

(51) Past experience in the NRTRDE market indicates that the expansion of smaller competitors on this market is slow. One obstacle that smaller NRTRDE providers face in expanding their operations and in challenging the entrenched position of the parties is that a limited number of NRTRDE agreements come up for renewal. Further, the parties would combine their very strong market positions in both DC and NRTRDE after the transaction.

(52) The Commission considers it unlikely that post-merger smaller competitors could constrain Syniverse in the same manner as Mach does currently.

Likely effects of the proposed concentration in NRTRDE

(53) The vast majority of customers expect that the proposed concentration would have a negative effect on price and/or quality in NRTRDE. During the market investigation, customers underlined the links between their concerns in DC and NRTRDE.

No countervailing buyer power

(54) Given the technical complexity of undertaking NRTRDE in-house as compared to the cost of outsourcing it, the option for MNOs to undertake NRTRDE in-house is not likely to be credible. Given its near-monopoly position in DC and NRTRDE and the lack of suitable alternatives, the merged entity would become an unavoidable trading partner for these critical services for MNOs. This would make it unlikely that customers can resist its attempts to increase prices or decrease quality in NRTRDE.

No likely timely and sufficient entry or expansion

(55) The Commission's investigation has not confirmed a firm intention of any company to enter into NRTRDE. Virtually no customer expects further entry in NRTRDE to occur in the next two years. Past experience suggests that such entry would also be unlikely.

Conclusion

(56) The Commission considers that the proposed concentration would significantly impede effective competition on the market for NRTRDE.

Horizontal non-coordinated effects in the broader market for NRTRDE and DC data feeds

(57) The Commission left open the question whether NRTRDE may be in the same market with the data feeds from the DC services that are used for fraud management and revenue assurance purposes.

(58) On such a broader market, NRTRDE would be by far the smaller fraction of that market. The market would mostly be accounted for by the data feeds from the DC service. The Commission already concluded that the proposed concentration would significantly impede effective competition on the DC market. Hence, the proposed concentration would also significantly impede effective competition on the broader market that encompasses NRTRDE and feeds from the DC service.

Conclusions

(59) On the basis of the above, the Commission concludes that the proposed concentration would lead to the creation of a dominant or near-monopoly position and significantly impede effective competition on both a separate market for NRTRDE and a market that encompasses NRTRDE and the data feeds from DC that are used for fraud management and revenue assurance purposes.

3. Horizontal non-coordinated effects in the FC market

Introduction

(60) As described in the Decision, the Commission has left open whether in-house provision of FC should be considered as part of the relevant market. The Commission conducted the competitive assessment separately for both possible markets.

Market shares

(61) The Commission's assessment shows that the parties have large combined market share in the FC market both on the narrower market excluding in-house provision and on the broader market encompassing also in-house provision.

(62) At the global level, the parties' combined market share for the market of FC services excluding in-house was consistently over [80-90] % over the years 2010 to 2012. The increment brought about by the merger would be about [20-30] %. Each of the other market players would not reach a 10 % market share. At the EEA level, the parties' combined market share dropped to just below [70-80] % in 2012. The merger increment would be about [30-40] %. Comfone and Nextgen gained a market share of just below [20-30] % and above [10-20] % respectively over the last couple of years.

(63) At the global level, the parties' combined market share for the market of FC services including in-house has been consistently over [60-70] %. The increment brought about by the merger would be about [10-20] %. Each of the other market players would not reach a 10 % market share, but in-house would represent 22 % of the market. At the EEA level, the parties' combined market share dropped to just below [30-40] % in 2012. The merger increment would be about [10-20] %. Each of the other market players would not reach a 10 % market share, but in-house would represent over 50 % of the market.

Horizontal non-coordinated effects in the narrower FC market excluding in-house provision Competitors' ability to exert competitive constraint

(64) It appears from the market investigation that, post-merger, other competitors such as Comfone and NextGen can pose a more effective competitive constraint on the parties than they can in DC. This is in particular due to the fundamental difference in the essence of the two services.

(65) FC services are simpler and more standardised than DC services and reputation and track record is less important for the provision of FC services than for DC services. FC services involve sending and receiving a much lower number of files each month compared to DC. Customers have also indicated that switching FC provider is much simpler and less risky than switching DC provider. Moreover, the time-frame for the performance of such activity is much longer than for DC, reflecting the fact that FC is a less critical service.

Countervailing buyer power

(66) The market investigation revealed that insourcing FC services is a relatively easy process that can be undertaken by all MNOs, with no distinction between large, medium or small MNOs. Furthermore, undertaking FC in-house appears to be an established business practice and not a mere theoretical possibility: indeed FC has been insourced by 22 % of MNOs worldwide and 52 % of MNOs in the EEA.

(67) Therefore, it appears that post-merger the parties are likely to be constrained by the MNO's ability to take FC in-house with respect to all MNOs, whether the threat is actual or potential, and that buyer power constitutes a countervailing factor mitigating the effects of the proposed concentration in the market for FC services for roaming.

Other countervailing factor: entry

(68) The market investigation has not revealed any indication of a likely, timely and sufficient entry into the market for FC for roaming. In particular, the market investigation has not revealed any firm intention of potential competitors, be it financial and accounting business process outsourcing ('F&A BPO') providers in other industries or general billing vendors, to enter into FC for roaming (10). Moreover, both the overwhelming majority of the customers (11) and competitors (12) do not expect further entry in the next two years. However, the competitive constraints from the in-house solution and existing competitors already seem sufficient to dispel the Commission's concerns.

Conclusion

(69) The Commission concludes that the proposed concentration is not likely to significantly impede effective competition on the market for the provision of outsourced FC services related to roaming.

Horizontal non-coordinated effects in the broader FC market including in-house provision (70)

As explained in the Decision, the Commission left open the question whether in-house provision of FC should be considered as part of the relevant product market.

(71) On the broader market including in-house provision, the parties' combined market shares would be lower and the parties would be subject to the same constraints to which they are subject to in the narrower market of outsourced FC markets, in particular the ability of customers to insource FC services. The Commission already concluded that the proposed concentration would not significantly impede effective competition on the market for the provision of outsourced FC services related to roaming. Hence, the proposed concentration would also not significantly impede effective competition on the broader market that encompasses the in-house provision of FC services.

4. Horizontal non-coordinated effects in A2P and P2P SMS services

(72) According to the investigation, the combined market share of Syniverse and Mach is below [0-5] % in every possible market definition except one: the worldwide market for international SMS exchanged via an SMS hub. In this particular market definition, Syniverse has a market share of [20-30] % and Mach has a market share of [0-5] %, giving a combined worldwide market share of [20-30] %.

(73) Even though the combined market share is relatively high, the increment related to the merger is less than [0-5] %, which is unlikely to lead to any material impact on the market.

(74) Furthermore, Syniverse' SMS hub activity is mainly focussed in the US market whereas Mach' SMS hub activity is more focussed in the EEA. In the EEA, the combined market share of the parties is less than [0-5] % in every possible market definition.

(75) The Commission considers that the proposed transaction is not likely to lead to any significant impediment to effective competition related to horizontal effects in A2P and P2P SMS services.

5. Vertical effects in relation to roaming hub services

(76) The Commission considers that the proposed transaction is not likely to lead to any significant impediment to effective competition related to vertical foreclosure in the roaming hub market.

6. Conglomerate effects in relation to other related markets

(77) The Commission considers that any concerns in relation to conglomerate effects in relation to other related markets arise from the high market power of the parties post-merger in relation to DC and NRTRDE services. In light of this, the remedy offered by the parties to address the horizontal competition concerns in the markets for DC and NRTRDE services ipso facto resolves any concerns in relation to conglomerate effects.

7. Efficiencies

(78) The Commission did not find verifiable evidence of adequate efficiency gains. Given the extremely high combined market shares in DC and NRTRDE, often approaching monopoly levels, and the absence of timely, sufficient, and likely entry in DC and NRTRDE markets, it appears very doubtful at this stage that any significant pass-on of alleged efficiencies to consumers would take place.

V. COMMITMENTS

The final commitments of 19 April 2013

(79) To remove the concerns, Syniverse commits to the structural divestment to a suitable purchaser (the 'purchaser') of essentially the entirety of Mach's DC and NRTRDE businesses in the EEA. As the assets and personnel that comprise these businesses are not held within one legal entity within Mach, they would be consolidated under a single holding company (the 'divestment business') and then divested to a suitable purchaser. In more detail, the final commitments consist of the following.

(80) Operational assets: The divestment business will own hardware loaded with Mach software to undertake DC and NRTRDE processing, as well as to deploy intelligence reporting tools used for downstream technology solutions such as fraud management and business intelligence/analytics. This hardware owned will be located in a data centre in Frankfurt am Main (Germany). The data centre facilities will be managed by a third party provider.

(81) Proprietary software: The divestment business will own the Mach software that undertakes DC and NRTRDE processing. This software includes all customisations that Mach's customers require as well as optional extra services. The purchaser will grant Syniverse a [...]-year, non-exclusive and royalty-free licence for this software. Syniverse will be limited to using the platform exclusively for the retained Mach customers until a time when they can be migrated off the Mach platform.

(82) In addition to the Mach DC and NRTRDE platforms, the divestment business will own the proprietary framework layer that supports Mach DC and NRTDE services. The divestment business will also own Mach intelligence services (13), which are used in downstream technology solutions, for instance for fraud management and business intelligence/analytics (14). The perpetual and irrevocable reverse licences that Syniverse will obtain from the purchaser for the use of the software layer that supports the other Mach services that Syniverse would retain and for the business intelligence tools included in the divestiture are non-exclusive.

(83) Third party licences: Syniverse commits to include third party licences that are necessary to carry out the divestment business' activities, and to procure that Mach will use its reasonable commercial endeavours to assist the purchaser to procure new licences on commercially reasonable terms (15).

(84) Supplier contracts: The divestment business includes all necessary supplier contracts, including the optional contract for outsourced data centre services, should the purchaser wish to take it.

(85) Personnel: The divestment business will include all Mach personnel dedicated to DC and NRTRDE services in the EEA. In total, the divestment business will have [...] transferred personnel.

(86) Customers: The divestment business will include the contracts and associated assets and personnel for [...], [...] and [...] and a range of mid-sized and smaller MNOs.

(87) Splitting of contracts: Syniverse explained that some customers that would be transferred to the divestment business also procure services other than DC or NRTRDE from Mach. [...]. Syniverse would, as a rule, provide the other services to the divested customers.

(88) Mach brand: The Mach name and all Mach trademarks relating to DC and NRTRDE will be transferred to the divestment business. The divestment business will grant Syniverse a sole royalty-free licence for [...] years to allow Syniverse to phase out and expunge all Mach branding from materials associated with the Mach non-DC and NRTRDE services that Syniverse would retain.

(89) Mach Optimiser: If it so wishes, the purchaser could also obtain the ownership of Mach Optimiser product and its associated software. In this case, the divestment business will grant a non-exclusive, perpetual, irrevocable, royalty-free licence to Syniverse for the use of Mach Optimiser.

(90) Purchaser criteria: In order to ensure the immediate restoration of effective competition on the DC and NRTRDE markets, the purchaser must, in addition to the standard criteria (financial stability, independence and no prima facie competition concerns):

- not be a purely financial investor,

- have the ability and willingness to develop the divestment business and keep pace with industry innovation (e.g. roll-out of LTE and WiFi),

- offer either financial clearing or business intelligence solutions (such as bill shock prevention or dual-IMSI),

- offer a sufficient range of additional services relevant to wireless communications (such as SMS, fraud management, revenue assurance or signalling),

- not be controlled by, or in the same corporate group as, a MNO,

- have the ability and willingness to develop DC and NRTRDE outside the EEA in the short term.

(91) A purchaser that meets the strict purchaser criteria will have to offer either financial clearing or business intelligence solutions, as well as a sufficient range of other services that are relevant to wireless communications. The final commitments specify that within a time period of [...] months after the closing of the sale of the divestment business to the purchaser, the divested customers can terminate the Mach contracts for the relevant other services that Syniverse would retain. This ensures that the divested customers can decide to procure those other services from the Purchaser and that the purchaser can offer its full suite of services to the divested customers following its acquisition of the divestment business.

(92) Upfront buyer clause: The notifying party cannot complete the acquisition of Mach until it has signed a binding sales and purchase agreement for the divestment business with a suitable purchaser that meets the strict purchaser criteria, and the Commission has approved both the purchaser and the terms of sale of the divestment business.

The Commission's overall assessment of the final commitments

(93) The Commission has assessed the suitability of the final commitments to fully eliminate the likely significant impediment to effective competition that would arise from the proposed concentration.

(94) The market test revealed that the final commitments essentially consist of the divestiture of the totality of Mach's EEA-wide DC and NRTRDE. The divestment business, including [...] and [...] would have a market share effectively equal to Mach's current EEA-wide market share, i.e. [40-50] % of the DC and NRTRDE markets. Having [...] as its flagship customer would grant the divestment business the indispensable proven reputation and track record that is needed to credibly bid for other Tier 1 MNOs that wish to be served at the group level.

(95) The Commission considers that with the final commitments, DC and NRTRDE customers would have a competing supplier that can replace the constraint that Mach exerts on Syniverse today. The purchaser of the divestment business would have all the assets that it needs to offer the service quality, reliability, reputation and track record that Mach offers to its EEA customers today.

(96) The Commission considers that the strict purchaser criteria in the final commitments and the termination rights that allow the divested customers to procure financial clearing or business intelligence/analytics solutions as well as a sufficient range of other services from the purchaser enable the purchaser to have a broad presence across DC/NRTRDE and other roaming-related and wireless communication services.

(97) Finally, taking into account the final commitments in their entirety, the Commission concludes with the requisite degree of certainty that the final commitments will be fully implemented and maintain effective competition on the DC and NRTRDE markets.

VI. CONCLUSION

(98) The Commission concludes that the final commitments remove the likely significant impediment to effective competition on the DC and NRTRDE markets that would arise from the proposed concentration.

(99) For the reasons mentioned above, the Decision concludes that the proposed concentration will not significantly impede effective competition in the internal market or in a substantial part of it.

(100) Consequently, the concentration should be declared compatible with the internal market and the functioning of the EEA Agreement, in accordance with Article 2(2) and Article 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.

FOOTNOTES:

(1) OJ L 24, 29.1.2004, p. 1.

(2) The market position of MVNOs for the provision of the services considered in this Decision is comparable to the one of this type of MNOs.

(3) Case COMP/M.4662 - Syniverse/BSG, recitals 18 and 19.

(4) See responses to question 7 of questionnaire Q1 - questionnaire to MNOs - Phase I and 10 of questionnaire Q2 - questionnaire to MVNOs - Phase I.

(5) See responses to question 8 of questionnaire Q1 - questionnaire to MNOs - Phase I and 11 of questionnaire Q2 - questionnaire to MVNOs - Phase I.

(6) See recitals 159, 166 and 167 of the Decision for further information on market shares based on operator count and market shares based on revenues. Market shares estimates for 2012.

(7) Market shares estimates for 2012.

(8) See footnote 7.

(9) See footnote 7.

(10) See responses to question 12 of questionnaire Q5 - questionnaire to potential competitors - Phase I.

(11) See responses to questions 50 and 52 of respectively questionnaire Q1 - questionnaire to MNOs - Phase I and Q2 - questionnaire to MVNOs - Phase I.

(12) See responses to question 57 of questionnaire Q4 - questionnaire to actual competitors - Phase I.

(13) The relevant tools are: (i) Mach Smart, an intelligence tool that provides for basic and enhanced reporting; (ii) Mach Roaming Management Services ('Mach RMS'), which is a roaming agreement management service; and (iii) Mach customer services ('MCS'), an ad hoc customer service tool.

(14) Customer configurations for these intelligence tools for all current Mach DC and NRTRDE customers (i.e. both retained and divested customers) would be included. On the contrary, customer configurations for these intelligence tools for the divested customers would be expunged to the greatest extent possible from Syniverse's licenced version.

(15) Such licences relate to commercially available off-the-shelf software packages sold by vendors including [...].