Atlas 2022 Holdings Limited (Atlas)

Page 1 of 8 COMPETITION COMMISSION OF INDIA Combination Registration No.C-2023/10/1059 29th November 2023 Notice under Section 6(2) of the Competition Act, 2002 filed by Atlas 2022 Holdings Limited CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 31(1) of the Competition Act, 2002 1. On 4th October 2023, the Competition Commission of India (Commission) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (Act). The notice has been filed by Atlas 2022 Holdings Limited (Atlas/Acquirer), pursuant to a board resolution dated 28th April 2023 and a relationship agreement dated 11th May 2023 signed between Emirates Telecommunications Group Company PJSC (e&) and Vodafone Group Plc. (Vodafone/Target) (Relationship Agreement) [Hereinafter, the Acquirer and Target are collectively referred to as ‘Parties’]. 2. The proposed combination relates to an acquisition by Atlas, a wholly owned subsidiary of e&, to increase shareholding/voting rights in Vodafone from previously held 14.6% to less than 25%, along with a right to appoint 2 non-executive members to the board of directors of Vodafone under the Relationship Agreement (Proposed Combination). Combination Registration No. C-2023/10/1059 Page 2 of 8 3. In terms of Regulation 14 of Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011; the Commission, vide communications dated 19.10.2023 and 10.11.2023, sought certain information(s)/ clarification(s), inter alia, relating to the activities of the Parties and the response to the same was received on 23.10.2023 and 16.11.2023. Further, certain additional information was received, vide submissions dated 31.10.2023, 02.11.2023, and 20.11.2023. Parties to the Proposed Combination 4. Atlas, a wholly owned subsidiary of e&, was incorporated on 24th February 2022 for the purposes of acquiring and holding e&’s current 14.6% interest in Vodafone. Atlas is a holding company and does not undertake any business operations either in India or elsewhere. 5. e& previously known as Etisalat Group is a telecommunications operator headquartered and based in Abu Dhabi, United Arab Emirates (UAE). It provides innovative digital solutions, smart connectivity and next-generation technologies to a variety of customer segments in 16 countries across the Middle East Asia and Africa.1 e& does not hold a licence to operate as a mobile network operator (MNO) in India. It does not have any Indian subsidiaries/ physical presence or undertake any business operations in India. In 2008, the Federal Government of the UAE transferred its 60% holding in e& to the Emirates Investment Authority (EIA), the sovereign wealth fund of the UAE, which is ultimately controlled by the UAE Federal Government. The remaining 40% of the shares are widely dispersed among other investors. 6. EIA is a sovereign wealth fund of the federal government of the UAE, established in 2007. The board of directors of EIA report to the Cabinet of the Federal Government of the UAE, and the chairman of the board is His Highness Sheikh Mansour Bin Zayed Al Nahyan, the current Vice President and deputy Prime Minister of the UAE. He is also a member of the UAE Royal Family and brother of the current president of the UAE. EIA 1e& provides telecommunications services in Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Côte d’Ivoire, Egypt, Gabon, Mali, Mauritania, Morocco, Niger, Pakistan, Saudi Arabia, Togo and the UAE. Combination Registration No. C-2023/10/1059 Page 3 of 8 has a shareholding of 50.12% in Emirates Integrated Telecommunications Company P.J.S.C (du), a telecom operator in the UAE. 7. Vodafone is the ultimate holding company of all the companies within its group. Vodafone is a British telecommunications operator, listed on the London Stock Exchange and the Nasdaq. In India, Vodafone is active in the telecommunications sector through Vodafone Idea Limited (VI India) and its step-down subsidiaries. Vodafone holds 32.29% stake in VI India. VI India is listed on both the Bombay Stock Exchange and the National Stock Exchange. Further, VI India holds a unified license, licenses for National Long Distance, International Long Distance, Internet Service Provider, and Infrastructure provider category- I, and offers mobile telephony services; broadband services; content and digital offerings; and various Value Add Services (VAS) such as entertainment services; voice and Short Message Service (SMS) based services such as caller tunes, etc.; and utility services such as missed call alerts, etc., in all 22 service areas of India. Identification and Assessment of Overlaps 8. It is submitted by the Acquirer that there are no horizontal or vertical relationships between EIA, e& and Vodafone (and their respective affiliates). Complementary Relationships 9. With respect to complementary relationships, it is stated in the notice that e& and du offer interconnection services and international roaming services through arm’s length commercial contracts with MNOs operating in India, including VI India. While e& has bilateral interconnection and international roaming agreements with VI India for Afghanistan, Egypt, United Arab Emirates (UAE), Morocco and the Kingdom of Saudi Arabia (Relevant Countries), du has a bilateral international roaming and interconnection agreement with VI India for UAE. 10. It is stated that e& considers such services to be complementary to its main business activities, i.e., the provision of retail mobile telecommunications services and retail fixed telecommunications services in the countries where e&/ du is active as MNO. This is Combination Registration No. C-2023/10/1059 Page 4 of 8 because interconnection services and international roaming services are used together with retail mobile telecommunications services and, similarly, interconnection services are used together with retail fixed telecommunications services to enhance the overall telecommunications services provided to the customer allowing them to connect with customers of other MNOs or access telecommunications services when travelling abroad. Moreover, both the international roaming agreements and the interconnection agreements that e& and du have with other Indian MNOs are bilateral in nature. I. Complementary Relationship: e&/ du as a customer of VI India 11. Wholesale international roaming services- The Acquirer has submitted that e&’s customers of retail mobile telecommunication services in the Relevant Countries/du’s customers of retail mobile telecommunication services in UAE rely on the telecommunication networks of VI India (or other Indian MNOs) to access such services when travelling to India. Therefore, the Parties exhibit complementary relationship in the following relevant markets: (a) the market for retail mobile telecommunications services in the Relevant Countries (through e&); (b) the market for retail mobile telecommunications services in UAE (through du); and (c) the market for wholesale international roaming services in India (through VI India). 12. Interconnection services- It is submitted that e&’s customers of retail fixed telecommunication services and retail mobile telecommunication services in the Relevant Countries/du’s customers of retail fixed telecommunication services and retail mobile telecommunication services in UAE, rely on VI India (or other Indian MNOs) to provide wholesale fixed call termination services and wholesale mobile interconnection services to be able to make a call/send an SMS to a customer of VI India (or customers of other Indian MNOs) in India. Therefore, the Parties exhibit complementary relationship in the following relevant markets: (a) the market for retail fixed telecommunications services in the Relevant Countries (through e&); (b) the market for retail fixed telecommunications services in the UAE (through du); (c) the market for retail mobile telecommunications services in the Relevant Countries (through e&); (d) the market for retail mobile telecommunications services in the UAE (through du); (e) the market for wholesale fixed