Portugal: AdC blocks Vodafone's acquisition of Nowo

Vodafone Portugal’s attempt to buy Portuguese telecom operator Nowo, first announced in September 2022, has been thwarted by Portugal’s Competition Authority (AdC).

The AdC issued a draft decision opposing the deal due to concerns it would stifle competition in the telecommunications sector. The AdC believes Nowo puts pressure on existing operators to offer competitive prices. With Vodafone owning Nowo, this pressure would disappear, potentially leading to price hikes for consumers.

The antitrust regulator argues Nowo’s customer base could attract other players, potentially benefiting competition more than a Vodafone takeover.

For its part, Vodafone Portugal disagrees with the decision, claiming it would have increased competition and benefited customers.

They also expressed disappointment that their proposed concessions to address the AdC’s concerns were rejected. These included an agreement with Digi providing for the transfer of part of Nowo’s spectrum and access to a wholesale bitstream offer over the fibre optic network owned by Vodafone. Additionally, Vodafone warned that the AdC’s decision could hinder their investments in the Portuguese market.

With the deal falling through, Nowo’s future remains unclear. The president of the Board of Directors of Nowo, Miguel Venâncio, told Economia Online in February that one of the possibilities if the sale was rejected was the “closing of Nowo” and dismissal of 500 workers.

According to figures from the National Communications Authority (Anacom), Nowo is the fourth largest player in the Portuguese telecom market, with a share of around 2.7 per cent in the fixed broadband, fixed telephony, mobile telephony and pay-TV segments.

Nowo’s network reaches more than one million homes in Portugal, of which around 900,000 with a mix of cable and fibre and 150,000 only with fibre.