Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels, 20.08.2019  
C(2019 ) 6196 final  
PUBLIC VERSION  
 
To the notifying party  
Subject : Case M. 9332 - ERICSSON / KATHREIN ANTENNA AND FILTER 
ASSETS  
Commission decision pursuant to Article 6(1)(b) of Counci l Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 15 July 2019 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 and following a referral pursuant to Article 4(5) 
of the Merger Regulation by which Telefonaktiebolaget LM Ericsson (publ)  
(“Ericsson”  or “Notifying Party” , Sweden) acquires within the meaning of Article 
3(1)(b) of the Merger Regulation sole control of par ts of Kathrein SE (“Kathrein 
Group”, Germany)  (the “Transaction”)  by way of purchase of assets . The 
Transaction  only concerns Kathrein Group’s business in passive antennas and filters 
as components for mobile network equipment  (“Kathrein” or “Target Busine ss”).3 
Ericsson  and Kathrein  Group are collectively referred to as the  “Parties”.  
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation ”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( “TFEU ”) has introduced certain changes, such as the replacement of  
“Commu nity” by “Union ” and “common market ” by “internal market ”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C 245, 22.07.2019 , p. 7. 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 
concerning non -disclosure of business 
secrets and other  confidential 
information. The omissions are shown 
thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
2 1. THE PARTIES  
(2) Ericsson  is a public company headquartered in Stockholm, Sweden. It is a global 
provider of network equipment and software, as well as services for network and 
business operations. Ericsson’s business is divided into four segments: “Network 
solutions”, “Digital Se rvices”, “Managed Services”, and “Other”.  
(3) Kathrein  Group , headquartered in Rosenheim, Germany, is a provider of 
communication technologies solutions. Kathrein divides its activities in: ”Business 
Solutions in communication technology”, “Mobile Communicatio n”, ”Satellite 
Reception”, “Special Communication”, and “Broadcast”.  
2. THE TRANSACTION  
(4) Under an Umbrella Asset Purchase Agreement entered into on 25 February 2019, 
Ericsson will acquire Kathrein Group’s antenna and filter assets  as components in 
mobile netw ork equipment, belonging to Kathrein  Group ’s wider “Mobile 
Communication” business segment .4 The Transaction will be carried out through the 
acquisition of various assets (e.g. tangible fixed assets, all inventory, all intangible 
assets and intangible fixe d assets) and the client base representing Kathrein  Group ’s  
antenn a and filter products business. Therefore, the Transaction consists of the 
acquisition of sole control by Ericsson over part of Kathrein Group within the 
meaning of Article 3(1)(b) of the M erger Regulation.  
3. EU DIMENSION  
(5) The Transaction does not have a Union dimension within the meaning of Article 
1(2) or Article 1(3) of the Merger Regulation.  
(6) Nonetheless, the Transaction fulfils the two conditions set out in Article 4(5) of the 
Merger Regula tion since it is a concentration within the meaning of Article 3 of the 
Merger Regulation and it is capable of being reviewed under the national 
competition laws of at least three Member States, namely Cyprus, Es tonia, Germany, 
the Netherlands  and, potenti ally, Austria.  
(7) On 19 March 2019, the Notifying Party informed the Commission by means of a 
reasoned submission that the Transaction should be examined by the Commission 
pursuant to Article 4(5) of the Merger Regulation. A copy of that submission was 
trans mitted to the Member States on 19 March 2019.  
(8) As none of the Member States competent to review the Transaction expressed its 
disagreement within 15 working days as regards the request to refer the case  to the 
Commission , the Transaction is deemed to have a  Union dimension pursuant to 
Article 4(5) of the Merger Regulation.  
                                                 
4  Kathrein Group’s product portfolio of antennas for special purpose deployments, e.g. for in -door use cases 
in trains and busses and for special communications, is not part of the Transaction . The “Train & Bus ” 
portfolio has already been sold to Huber + Suhner AG and the “Special Communications ” portfolio is in 
the process of being sold to a third party. See Notifying Party’s Reply to RFI 9 of 6 August 2019, question 
8 and Notifying Party’s Reply to RFI 11 of 15  August, question 1.  
 
3 (9) Therefore, on 10 April 2019, the Commission informed the Parties and Member 
States that the Transaction  was deemed to have a Union  dimension and  would  have 
to be notified to the Commission . 
4. RELEVANT MARKETS  
4.1. Introduction  
(10) Ericsson supplies mobile network equipment, one part of which is Radio Access 
Network (“RAN”) equipment. RAN equipment establishes a connection between 
individual mobile devices and the core network through radio connections . Notable 
components of the RAN equipment are antennas, filters, radio units5, baseband6, and 
cabling.  Ericsson manufactures baseband and radio units which are the key 
components of the RAN equipment that it supplies to mobile network operators 
(“MNOs”) . 
(11) Kathrein manufactures antennas and filters and supplie s them directly to MNOs or to 
RAN equipment suppliers, such as Ericsson, which resell them to MNOs  as 
complementary components of the RAN equipment.  
4.2. RAN equipment  
4.2.1.  Product market definition  
4.2.1.1.  Commission pre cedents  
(12) In Nokia/Alcatel -Lucent7, Ericsson/Nortel Group8, and Nokia Siemens 
Networks/Motorola Network Business9, the Commission distinguished between (i) 
RAN equipment, (ii) Core Network Systems (“CNS”)10 and (iii) network -related 
services.  
(13) With regard to RAN equipment, in Nokia/Alcatel -Lucent , the Commission examined 
whether a potential market for RAN equipment could be sub -segmented as follows: 
(i) by technology standards (2G/3G/4G)11, (ii) between macro -cells12 and small 
                                                 
5  The radio unit contains the analogue to digital conversation logic and functionality, amplifiers etc. The 
radio unit transforms the digital signals received into analogue and transmits or receives them to/from the 
antenna via a cabl e (feeder).  
6  The baseband (or digital unit) contains the RAN functionality and connects the RAN with the Core/IP 
network.  
7  Commission decision of 24 July 2015 in case M.7632 - Nokia/Alcatel -Lucent , paragraphs 19 -24. 
8  Commission decision of 2 March 20 11 in case M.6095 - Ericsson/Nortel Group (MSS & Global Services) , 
paragraph 27.  
9  Commission decision of 18 January 2011 in case M.6007 - Nokia Siemens Networks/Motorola Network 
Busines s, paragraph 10.  
10  Core Network System solutions include the followi ng main elements: (i) wireless packet core equipment, 
(ii) carrier IP telephony solutions, and (iii) operation and business support software. RAN establishes a 
connection between the individual mobile devices and the core network through radio connections.  See 
Nokia/Alcatel -Lucent, paragraphs 160 -196. 
11  RAN equipment can be grouped into the standard generations 2G/2.5G (GSM), 3G (WDCMA), 4G (LTE) 
and 5G (NR).  
12  Individual geographic areas covered with mobile radio equipment are known as "cells" or "macro cells", 
as the coverage they provide can have a radius range of few tens of kilometres.  
 
4 cells13 and (iii) Sin gle RAN ("SRAN") equipment14 as a potential separate market 
segment. Ultimately, the Commission left the precise market definition open.  
4.2.1.2.  Notifying Party’s views  
(14) The Notifying Party refers to the Commission precedents listed at paragraphs (12)-
(13).  
(15) With re gard to the possible sub -segmentation of the market for RAN equipment by 
technology standards, the Notifying Party submits that current RAN equipment 
supports multiple technology standards and further segmentation is not justified.15 
More generally, with re gard to technology standards, the Notifying Party explains 
that the share of 2G and 3G has been stead ily declining in the past few years while 
4G is increasing and 5G has been slowly emerging since 2018.16 The Notifying Party  
explains that , at the present d ate, 5G has not  yet been commercially launched. 
Nevertheless, the Notifying Party considers that , since 2017 and 2018, 5G mobile 
network technology is no  longer in a pure development phase .17  
(16) With regard to the possible sub -segmentation between small cells  and macro cells, 
the Notifying Party consider s that such distinction is not justified. In the Notifying 
Party’s view, the main difference between macro cell RAN equipment and small cell 
RAN equipment lies in the output power. While small cell RAN equipmen t can 
provide output for a smaller radius (normally between 10 m to 100 m), the radius of 
macro cell RAN equipment is significantly larger (normally up to 20 km or more). 
The Notifying Party explains that s mall cells are generally  used if the macro cells’ 
capacity is insufficient  and needs to be complemented to deploy a mobile network , 
for instance during time slots with heavy data traffic . Small cells thus can provide 
hot spots for users such  that users receive a better signal in certain areas.18 
(17) With regar d to the potential separate segment for SRAN equipment, the Notifying 
Party submits that such segmentation would  no longer be relevant , as currently all 
RAN equipment supports multiple technology standards  (see paragraph (15)).19 
Therefore, in the Notifying  Party's view, SRAN equipment forms part of the overall 
market for RAN equipment.   
(18) With regard to new solutions emerging in the industry, such as virtualised RAN 
solutions20, the Notifying Party submits that there are virtually no  (or very few) 
                                                 
13  Small cells are t echnology, deployed mainly in densely populated areas to provide data traffic offloading. 
Small cells have a radius of between 10 meters to 1 or 2 k m. They  can be used to provide in -building and 
outdoor wireless service.  
14  SRAN technology allows mobile operators to run and operate multiple mobile telecommunications  
standards (2G/3G/4G)  on a single network (See  Nokia/Alcatel -Lucent, paragraph  16). 
15  Notifying Party's Reply to RFI 11 of 15 August, question 3.  
16  The Notifying Party considers that companies no longer invest in 2G network technology and that 4G will 
replace 3G in Europe by 2020 . 
17  Form CO, paragraph 55.  
18  Form CO, paragraph 140.  
19  Form CO, paragraph 143  Notifying Party's Reply to RFI 11 of 15 August, question 8 . 
20  According to the Notifying Party, virtualis ed RAN (vRAN) was formerly ref erred to as Cloud RAN. 
Virtualis ation involves decoupling software from hardware. The software sy stems that handle the network 
user traffic, is moved from hardware on the sites to a cloud. This means that the processing functions are 
not site hardware dependent anymore. The radio processing intelligence is also moved higher up in the 
 
 
5 current comm ercial deployments in which  the full RAN equipment is virtualised. 
Therefore, according to the Notifying Party virtualised RAN equipment does not 
have any r elevance to assess  the Transaction.21 
(19) In the Notifying Party’s view, the Commission does not have to conclude on the 
exact product market definition with regard to RAN equipment as the Transaction 
does not give rise to competitive concerns under any plausible market definition.22 
4.2.1.3.  Commission’s assessment  
(20) The market investigation provides mixed results as to  whether segmenting the RAN 
equipment market is appropriate.23  
(21) Several respondents explain that RAN equipment suppliers are generally active 
across all possible segments.  With regard to a possible segmentation by technology  
standards , respondents explain that the same equipment can b e used across different 
technologies , although several respondents expect 5G technology to require 
equipment different from  legacy technolog ies. Respondents did not express any firm 
views as regards as possible segment for SRAN , which the Commission understands 
may no longer be relevant given that RAN equipment supports multiple  technology 
standards. A number of market participants consider that the segmentation between 
small cells and macro cells is still relevant.  
(22) As regards virtualised RAN solutions, the results of the market investigation strongly 
suggest that they belong to the same product market as traditional RAN solutions .24 
Respondents explain that while virtualised RAN solutions use very different 
technologies  from tra ditional RAN solutions , they perform the same functions as 
traditional RAN solutions.  Moreover, respondents confirm that virtualised RAN 
solutions are a new trend in the market which may gain more relevance in the future.  
(23) Moreover, as explained in more de tail in Section 4.3 and 4.4 below, the results of the 
market investigation indicate that passive antennas , antenna modules and filters 
should be considered to belong to markets  distinct from the market for other RAN 
equipment  components and that the same f inding may potentially apply to active 
antennas . Accordingly, t he notion of 'RAN equipment' used in this section and in the 
remainder of this decision, unless specified otherwise, excludes passive antennas, 
active antennas, antenna modules ( see Section 4.3 .1), and filters ( see Section 4.4.1).   
(24) With the exception of the segmentation mentioned in the previous paragraph , for the 
purpose of this decision, the exact product market definition for RAN equipment can 
be left open, as the Transaction does not raise serious doubts as to its compatibility 
with the internal market  under any plausible product market definition . 
                                                                                                                                                      
network architect ure and provides additional flexibility for scaling the network in order to increase 
capacity. It reduces the need for expensive proprietary hardware and enables to use cheaper option “off 
the shelf” hardware . 
21  Response to RFI 3 of 10 July 2019.  
22  Form CO, paragraph 71.  
23  Q1 – Questionnaire to Antenna and Filter Manufacturers (“Q1”) , replies to question 21; Q2 – 
Questionnaire to RAN Equipment Suppliers (“Q2”) , replies to question 19; Q3 – Questionnaire to Mobile 
Network Operators (“Q3”) , replies to ques tion 20.  
24  Q1, replies to question 22; Q2, replies to question 20; Q3, replies to question 21.  
 
6 4.2.2.  Geographic market definition  
4.2.2.1.  Commission precedents  
(25) In Nokia/Alcatel -Lucent ,25 the Commission considered that the relevant geographic 
market for RA N equipment is at least EEA -wide, if not global. The Commission 
ultimately left the exact geographic market definition open.   
4.2.2.2.  Notifying Party’s views  
(26) The Notifying Party  submits that the relevant geographic market is at least EEA -
wide if not worldwide. In  the Notifying Party’s view, this is because (i) mobile 
network equipment is based on international standards, (ii) there are no regulatory 
barriers, (iii) transportation costs are low, and consequently (iv) suppliers and 
customers generally supply and sou rce RAN equipment on a worldwide basis.26  
4.2.2.3.  Commission’s assessment  
(27) A majority of respondents to the market investigation indicate that they supply 
and/or procure RAN equipment on a global basis , with  the main RAN equipment 
suppliers based in Europe, USA and  Asia.27  
(28) In any event, for the purpose of this decision, the exact geographic market definition 
for the supply of filters can be left open, as the Transaction does not raise serious 
doubts as to its compatibility with the internal market regardless of whet her the 
market is EEA -wide or global . 
4.3. Antennas  
(29) Antennas function as a converter between two kinds of electromagnetic waves, cable 
bounded waves and free space waves. They link the users’ equipment and the base 
transceiver station in the RAN. An antenna cov ers a specific area which depends on 
the antenna's capacity . 
(30) There are different types of antennas , depending on the number of ports and on 
whether the antenna is “passive”, “active” or hybrid .  
(31) The number of ports of an antenna determines the number of si gnals that can be 
received and transmitted by the antenna, i.e. the number of frequency bands that can 
be used. A single -band antenna  is a 2 -port antenna which supports the usage of one 
frequency band. Multi -band antennas  combine various bands and functions in one 
antenna (e.g. a 4 -port antenna supports two frequency bands, a 6 -port antenna 
supports three frequency bands etc.).28 
(32) Passive antennas  are connected to other components of the RAN equipment (e.g., 
radio, baseband)  via a high frequency coax cable (a “feeder”) which transports the 
analogue signal. The use of a feeder with passive antennas entails some signal loss 
                                                 
25  Commission decision of 24 July 2015 in case M.7632 - Nokia/Alcatel -Lucent , paragraphs 25 -35. 
26  Form CO, paragraph 100.  
27  Q1, replies to questions 25; Q2, replies to question s 24; Q3, replies to question  25. 
28  Form CO, paragraph 94.  
 
7 from the radio unit to the passive antenna due to the characteristics of radio waves 
and the transmission  of analogue signals .29 
(33) Active antennas  integrate  an antenna module and a radio component in the same 
physical unit. Antenna modules  are a specific kind of passive antenna exclusively 
designed to be used in an active antenna as they have provisions for mech anical 
mounting and for an electrical connection of a radio module in order to create an 
active antenna product.30 In an active antenna, the antenna module and the radio 
component are thus mechanically and electrically integrated to avoid signal loss. The 
Notifying Party explains that signal loss is also prevented in active antennas due to 
the existence of a digital connection between the radio and baseband, irrespective of 
the distance between them. However, the housing for active antennas is larger and 
heavier than for passive antennas and therefore its installation is more complex.31  
(34) According to the Notifying Party, capacity requirements have changed due to the 
development from 2G/3G  over 4G to 5G mobile networks . While passive antennas 
will still be  used in 5G networks, the Notifying Party expects an increasing demand 
by MNOs for active antennas in order to increase capacit y and improve the 
performance of 5G networks.32 
(35) There are two types of active antennas: (i) semi -active antennas  and (ii)  advanced 
antenna systems  ("AAS"), also called massive multiple -in multiple -out (“ massive 
MIMO”  or “mMIMO” ). In a semi -active antenna, conventional radio units are built 
into an antenna housing . In an AAS antenna,  the radio unit is physically integrated 
with the antenna.  The Notifying Party explains that this is necessary due to the large 
number of antenna branches (16 up to hundreds) used to provide the ability to 
concentrate a narrow radio beam to individual or multiple users and the requirement 
of their synchro nisation. The Notifying Party submits that AAS active antennas  still 
represent a small proportion of sales but their importance is expected to rapidly 
increase with the evolution of 5G networks. 33 
(36) In addition, there are hybrid antennas  that can be describe d as a mounting solution 
where the antenna manufacturer has devised a way of mounting an AAS active 
antenna on top of one of its passive antennas, behind a shroud that has the same 
profile and look s as the passive antenna.34 
(37) In light of the foregoing , three  possible segmentations of the antenna market can be 
considered: (i) single -band and various types of  multi -band antennas  (e.g. 4 -port, 6 -
port etc. antennas) , (ii) passive antennas and antenna modules for active antennas, 
and (iii) passive antennas  and ac tive antennas. Active antennas  (and antenna 
modules integrated therein)  may also be segmented between semi -active antennas 
and AAS  (or mMIMO ) antennas .  
                                                 
29  Form CO, paragraph 57.  
30  Form CO, paragraph 58 . 
31  Form CO, paragraph 57.  
32  Form CO, paragraph 87.  
33  The share of semi -active antennas in the total size of the antenna market at the worldwide level (based on 
sales) is expected to decline in the coming years (from around […] in 2019 to […] in 2022). AAS are 
expected to account for […] of the total antenna market in 2022 as compared to […] in 2019. See Form 
CO, paragraphs 57 and 79.  
34  Form CO, paragraph 311.   
 
8 4.3.1.  Product market definition  
4.3.1.1.  Notifying Party’s views  
(38) In the Notifying Party’s view, antennas belong to a separate product market , distinct  
from other RAN equipment  components .35  
(39) As regards the possible distinction between single - and multiband antennas, the 
Notifying Party explains that, irrespective of the number of ports, passive antennas 
fulfil the same fu nction  and are thus substitutable .36 In the Notifying Party’s view, 
MNO s can achieve the same functionality by using two or more antennas with a low 
number of ports instead of one antenna with a high number of ports.  However, as 
MNOs require compact antenna s, the global trend is clearly towards multiband 
antennas with an increasing number of bands.37 The Notifying Party considers that 
there is supply -side substitutability as antenna manufacturers generally offer both 
single -band and different types of multi -band antennas.38  
(40) The Notifying Party did not express any firm views as to other possible sub -
segmentation s of the antenna product market .39 However, t he Notifying Party  
considers that technical and commercial differences between antenna modules, 
passive and active antennas m ay indicate that they belong to  separate product 
markets .  
(41) First, a ccording to the Notifying Party, a n antenna module is specifically designed to 
be included in a RAN equipment supplier ’s final product (i.e. the active antenna) and 
is supplied  to one specific RAN equipment supplier only . In contrast, p assive 
antennas are more standardis ed products designed to fulfil the needs of multiple 
MNOs.  
(42) Second, i n the Notifying Party’s view, w hile passive and active antennas fulfil the 
same gene ral technical fun ction , the y have different use cases. The demand for 
active antennas is driven by the need for more capacity, such as in densely populated 
areas or in the context of the roll -out of 5G networks. Moreover, t he price level for 
an active ante nna is significantly higher compared to a passive antenna due to the 
costs of the additional radio component.   
(43) Third, w hile antenna modules and passive antennas are produced by antenna 
manufacturers, RAN equipment suppliers are best suited to manufacture  active 
antennas  which requires radio  capabilities .  
                                                 
35  Form CO, paragraph 93.  
36  The distinction between single -band and multi -band antennas is primarily relevant with regard to passive 
antennas as semi -active antennas currently available on the market generally support a limited number of 
frequency bands.  AAS active antennas with multiple frequency bands are being released by other 
suppliers during 2019. [product release] . See Notifying Party's Reply to RFI 11 of 15 August 2019, 
question 3.   
37  Notifying Party’s Reply to RFI 9 of 6 August 2019, question 2.  
38  Form CO, paragraph 94 -98. 
39  Notifying Party’s  reply to RFI 7  of 25 July 2019 , question 14.  
 
9 (44) With regard to hybrid antennas, the Notifying Part y submits that these consists of 
two separate antenna products , the passive antenna and the active antenna, which are 
mechanically connected .40  
(45) The Notifying Party submits that the Commission does not have to conclude on the 
exact product market definition as the Transaction does not raise any competition 
concerns under any plausible product market definition.41 
4.3.1.2.  Commission’s assessment  
(46) The Commission has not previously examined the relevant market  for antenna s as 
components for mobile network equipment.42 
RAN equipment and passive antennas  
(47) The results of the market investigation suggest that passive antennas , as well as 
antenna modules , belong to  a product market  distinct from the market for  RAN 
equipment components . 
(48) First, a majority of the respondents consider that passive  antennas are distinct from 
other components of the RAN equipment  and therefore belong to a separate product 
market.43  
(49) Second, t he results of the market investigation confirm that passive  antennas have a 
distinct function  in the RAN  and are not substitutable with other RAN equipment 
components . Moreover, MNOs can mix -and-match , purchasing passive antennas on 
a stand-alone basis, separately from other components of the RAN equipment, or as 
part of a bundle consisting of a passive antenna  and other RAN equipment 
components (“turnkey solution”).  
(50) Third, f rom the supply side , respondents indicate that passive antennas  and other 
RAN equipment components  are generally manufactured  by a different set of 
suppliers , with the except ion of Huawei which produces both passive antennas  (as 
well as antenna modules)  and other RAN equipment components.44 
(51) Therefore, the Commission conc ludes  that passive antennas and antenna modules 
belong to a product market distinct from other RAN equipment components.  
RAN equipment and active  antennas  
(52) With regard to active antennas , several respondents  point to the closer integration of 
antenna s and radio units  in active antenna systems . In these, antennas are an integral 
                                                 
40  Form CO, paragraph 312.  
41  Form CO, paragraph 99.  
42  Previous Commission decisions  do not examine or specify whether antennas are part of the RAN 
equipment market or constitute a separate product market (see Commission decision of 24 July 2015 in 
case M.7632 - Nokia/Alcatel -Lucent ; Commission decision of 22 June 2015 in case M.7563 - 
CommScope/TE BNS ; Commission decision of 2 March 2011 in case M.6095 - Ericsson/Nortel Group 
(MSS & Global Services) ; Commission decision of 18 January 2011 in case M.6007 - Nokia Siemens 
Networks/Motorola Network Business ).  
43  Q1, replies to question 3; Q2 , replies to question 3; Q3 , replies to question 3.  
44  Q1, replies to question 3.1; Q2, replies to question 3.1; Q3, replies to question 3.1.  
 
10 part of the RAN equipment  and cannot be procured separately from other RAN 
equipment components .45 Therefore, active antennas may not constitute a separate 
product market distinct fro m other RAN equipment components.  
(53) The Commission considers that, for the purpose of the present decision, the exact 
product market definition can be left open as the Transaction does not raise serious 
doubts as to its compatibility with the internal market , irrespective of whether active 
antennas constitute a separate product market distinct from other RAN equipment 
components . 
Single -band and multi -band passive  antennas  
(54) The results of the market investigation indica te that there is no demand -side 
substitut ability between si ngle- and multi -band antennas, although  there may be 
substitutability from the supply side.  
(55) From the demand -side, r espondents to the market investigation explain that while the 
basic function of all antennas is the same, single -band and multi -band antennas are 
generally used for different purposes  and t he decision to deploy single - or multi -
band antennas is primarily driven by these  deployment considerations. Multi -band  
antennas are designed to support multiple bands of frequencies . They  are used to 
reduce the number of antennas installed on a site given that  the same coverage can 
be achieved with one multi -band antenna as with several single -band antennas. 
Single -band antennas , on the other hand, are mainly used for special purposes.46 
(56) A majority of respondents to the market investigation express the view that multi -
band antennas present characteristics (e.g., in terms of functionalities, performance, 
overall size/weight, price) that cannot be replicated by using single -band antennas, 
and v ice versa.47 In particular, in most cases, multi -band antennas cannot be replaced 
with several single -band antennas due to size, weight or volume restrictions and 
visual impact limitations.  
(57) Accordingly, d emand for single -band and multi -band antennas is not responsive to 
price changes as confirmed by  the results of the market investigation. A majority of 
respondents, most notably  MNOs, responded that they would not switch from 
procuring multi -band antennas to single -band antennas (or vice versa) in case of a 
price increase of 5 -10%.48   
(58) From the supply side, t he vast majority of respondents consider that single - and 
multi -band antennas are fully substitutable.49 While it is easier to design and 
manufacture single -band antennas, ( nearly ) all antenna manufacturers  have 
developed and offer both types of antennas  without any relevant specialisations .  
(59)  The Commission considers that, for the purpose of the present decision, the exact 
product market definition can be left open as the Transaction does not raise serious 
doubts as to its compatibility with the internal market, irrespective of whether the 
                                                 
45  Q2, replies to question 3.1 ; Q3, replies to question 3.1 . 
46  Q1, replies to question 5; Q3, replies to question  5. 
47  Q1, replies to question 6; Q2, replies to question 5; Q3, replies to question 6.  
48  Q1, replies to questions 7 and 8; Q2, replies to questions 6  and 7 ; Q3, replies to question 7 and 8.  
49  Q1, replies to question 9; Q2, replies to question 8; Q3, replies to question 9.  
 
11 relevant product market is further segmented between  single -band and multi -band 
antennas.  
Passive antennas and antenna modules  
(60) There are mixed views as to whether a segmentation between passive antennas and 
antenna modules is appropriate.50 Overall, t he results of the market investigation 
suggest that passive antennas and antenna modules may be substitutes from the 
supply side, but there does not appear  to be any dema nd-side substitutability.  
(61) Respondents  to the market investigation explain that antenna modules are 
specifically developed and supplied to RAN equipment suppliers for the production 
of active antennas and therefore constitute a separate business for antenna 
manufacturers  in the upstream market .51  
(62) In contrast, ante nna manufacturers emphasize  the fact that antenna modules are built 
from  the same components as passive  antennas. Antenna manufacturers confirm  that 
the main difference  lies in the procurement  process : passive antennas can be sold on 
a stand -alone basis  to end customers , while antenna modules are produced for 
original equipment manufacturers , i.e., RAN equipment suppliers,  which integrate 
them directly into the RAN equipment and sell them to end customer s.52 
Importantly, p assive antennas  are standard ised product s while antenna modules are 
customer specific , i.e. , manufactured in accordance with customer  specifications. 
Antenna modules for active antennas are developed on the basis of partnership 
agreements  between antenna manufacturers and RAN equipment suppliers .53 
(63) From the supply -side, a majority of respondents indicate that it is common for 
antenna manufacturers to produce both passive antennas and antenna modules.54  
(64) Respondents did not express any views as regards a possible distincti on between 
antenna modules for semi -active and AAS antennas .  
(65) The Commission considers that, for the purpose of the present decision, it can be left 
open whether there is a separate product market for antenna modules , distinct from 
passive antennas , and wh ether such a market would have to be further segmented 
depending on the type of active antenna for which antenna modules are used, i.e. 
semi -active and AAS active antennas. The  Transaction does not raise  serious doubts 
as to its compatibility with th e inte rnal market under any plausible market definition.  
Passive antennas and active antennas  
(66) The results of the market investigation suggest that a segmentation between passive 
and active antennas  is appropriate  given the  limited degree of  demand -side 
substitu tability and the lack of supply -side between passive and active antennas .55  
                                                 
50  Q1, replies to question 11; Q2, replies to question 9.  
51  Q2, replies to question 9.1. 
52  Q1, replies to question  11.1. 
53  Q1, replies to question 28.2; Q2, replies to question 28.1.  
54  Q1, replies to question 12; Q 2, replies to q uestion 10.  
55  Q1, replies to question 13; Q2, replies to question 11; Q3, replies to question 11.  
 
12 (67) First, f rom the demand -side, t he results of the market investigation confirm that 
passive and active antennas have the same basic function, i.e. , provid ing coverage 
for mobile communication services . However, there are important differences 
between passive and active antennas in terms of their technical and commercial 
characteristics as well as use cases.  
(68) The results of the market investigation confirm that active antenn as have a better 
performance than passive antennas  stemming from lower signal loss and higher 
capacity . Therefore, they are used in highly densely populated areas while passive 
antennas are used for standard sites. Active antennas are needed in the context  of the 
5G network roll out as they support massive MIMO applications much more 
efficiently and have better beamforming56 capabilities .57 Respondents to the market 
investigation also confirm that AAS active antennas are technically  more advanced 
than semi -active antennas and will be more relevant in the long run in the context of 
the 5G roll -out.58 
(69) At the same time, the results of the market investigation also point to some 
disadvantages that active antennas have in comparison to passive antennas: (i) they 
are heavier due to integration of the radio unit, (ii) they only  support a limited 
number  of frequency bands , (iii) they  are less scalable and more maintenance -
intensive, and (iv) they  contain RAN vendor -proprietary components and interfaces  
increasing MNOs’ dependence on a specific RAN equipment supplier. By contrast, 
passive antennas are interoperable with RAN equipment of any RAN vendor due to 
established standardised physical interfaces.59 
(70) Second, i n respect of price, respondents indicate that active antennas are more 
expensive than passive antennas  but also explain that the choice for active antenna s 
seems to be  driven by their improved performance and not by their price .60 
Accordingly, demand for passive and active antennas is not responsive to price 
changes, as confirmed by  the results of the market investigation. A majority of 
respondents, most notably  MNOs , responded that they would not switch from 
procuring passive antennas to active antennas (or vice versa) in case of a price 
increase of 5 -10%.61  
(71) Third , MNOs responding to th e market investigation explain that passive and active 
antennas are complementary and  they typically would need to  use a  mix of active 
and passive antennas in their networks .62 Currently, the share of active antennas 
installed in  mobile networks is very small and according to some respondents, active 
antennas are only “ used for pilots and still in development ”.63 Several  MNOs 
indicate that they  already deploy  a mix of passive and active antennas. Several  
                                                 
56  Beamforming is a technology which can change electronically the direction and shape of an antenna 
pattern of a directional antenna . Beamforming is the bas ic technique used by AAS active antennas to 
increase capacity in a RAN. This is enabled by the higher number of antenna branches in an AAS.  See 
Notifying Party's Reply to RFI 10 of 8 August 2019, question 2. 
57  Q1, replies to question 14 -16; Q2, replies to  questions 12 -14. 
58  Q3, replies to question 11.1 and 17.1.  
59  Q1, replies to question 14 -16; Q2, replies to question 12 -14; Q3, replies to question 11.1 and 12.1.  
60  Q1, replies to question 15.1.  
61  Q1, replies to questions 15 and 16; Q2, replies to questions 14 and 15; Q3, replies to questions 14 and 15.  
62  Q3, replies to question 12.2.  
63  Q3, replies to question 12.2.  
 
13 MNOs explained that AAS act ive antennas are necessary fo r the deployment of 5G 
network, especially to efficiently employ the 3.5GHz band. As a result, the 
proportion of active antennas in mobile networks is expected to grow significantly.64 
(72) Fourth, a  majority of respondents to the market investigation do  not consider that 
there is supply -side substitution between passive and active antennas.65 Passive 
antennas are produced by dedicated antenna manufacturers and supplied to MNOs 
on a standalone basis or as part of a turnkey solution. The only exception is Huawei 
which has end -to-end in-house capabilities . By contrast , active antennas are 
manufactured by RAN equipment suppliers  and antenna manufacturers only supply 
the antenna module as they generally lack radio capabilities.  MNOs procu re active 
antennas as integrated solutions only from RAN equipment suppliers .66  
(73) Respondents did not express any views as regards a possible distinction between 
different types of active antennas, i.e. semi -active and AAS antennas.  
(74) Therefore, the Commission  concludes that passive antennas  and active antennas  
belong to  separate product markets .67 For the purpose of the present decision, it can 
be left open whether the market for active antennas has to be further segmented 
between semi -active and AAS active ant ennas as t he Transaction does not raise 
serious doubts as to its compatibility with the internal market under any plausible 
market definition.  
Conclusion  
(75) In light of the foregoing, for the purpose of this decision, the Commission concludes 
that passive  antennas  belong to a separate product market distinct from other RAN 
equipment components. In addition, t he Commission concludes that passive and 
active antennas  belong to separate product markets.  
(76) The question  whether passive antennas and  antenna modules  as well as single -band 
and multi -band antenna s belong to  distinct product markets  can be left open . 
Likewise, the question whether the potential  product market for active antennas 
would have  to be segmented between  semi -active and AAS active antennas and 
whether antenna modules used for semi -active antennas and AAS antennas belong  to 
distinct product markets  can be left open . With respect to these questions,  the 
Commission considers that  the Transaction does not raise serious doubts as to its 
compatibility  with the internal market  under any plausible product ma rket definition .  
                                                 
64  Q3, replies to question 12.2.  
65  Q3, replies to question 15.  
66  Q3, replies to questions 11.1 and 15.1.  
67  As regards hybrid anten nas, the results of the market investigation confirm that these are merely a 
combination of a passive and an active antenna . To build a hybrid antenna, RAN equipment suppliers rely 
on antenna manufacturers to deliver the passive antenna, the antenna module  for the active antenna system 
and finally to mechanically connect the two different antennas. Therefore, hybrid antennas simply consist 
of two separate antenna products which are mechanically connected. Market participants have not 
expressed any concerns with regard to the competitive effects of the Transaction in relation to hybrid 
antennas. As hybrid antennas are a combination of a passive and an active antenna, the Commission does 
not c arry out a separate analysis in this regard . In any event, similar c onsiderations would apply in the 
context of an assessment of hybrid antennas as those set out in in Section  5.2.3 for passive antennas and 
Section 5.3.3. for active antennas .  
 
14 4.3.2.  Geographic market definition  
4.3.2.1.  Notifying Party’s views  
(77) The Notifying Party refers to the Commission decision in Nokia/Alcatel Lucent68 
according to which the relevant geographic market for RAN equipment is a t least 
EEA -wide, if not global (as discussed in paragraph (25)). The Notifying Party 
submits that the same market dynamics apply to antennas, which are RAN 
equipment components.  
(78) The Notifying Party submits that the Commission does not have to conclude on the 
exact geographic market definition as the Transaction does not raise any competition 
concerns under any plausible geographic market definition.  
4.3.2.2.  Commission’s assessment  
(79) A majority  of respondents to the market investigation indicate that they supply 
and/or procure (all types of) antennas on a global basis , with the main suppliers 
being based in Europe, USA and Asia .69  
(80) In any event, for the purpose of this decision, the exact geographic market definition 
for the supply of antennas can be left open, as the Transaction does not raise serious 
doubts as to its compatibility with the internal market regardless of whether the 
market is considered to be EEA -wide or global . 
4.4. Filters  
(81) Filters perform mainly two functions: they amplify the signal from the transceiver 
for transmission through the antenna, and connect different passive antennas into one 
common feeder to minimize bot h signal loss  on the feeder as such as well as to 
minimize th e need for individual feeders to be installed in the mast up to the antenna.  
4.4.1.  Product market definition  
4.4.1.1.  Notifying Party’s views  
(82) In the Notifying Party’s view, RAN equipment and filters belong to separate product 
market s.70  
(83) According to the Notifying Party, filters are commodity -type products with no 
significant distinguishing characteristics  and no further segmentation of the market 
for filters is necessary .71  
(84) The Notifying Party submits that the Commission does not have to conclude on the 
exact product mark et definition as the Transaction does not raise any competition 
concerns under any plausible product market definition.72 
                                                 
68  Commission decision of 24 July 2015 in case M.7632 - Nokia/Alcatel -Lucent , paragraphs 19 -24. 
69  Q1, replies to questions  23; Q2, replies to question s 21; Q3, replies to question s 22.  
70  Form CO, paragraph 93.  
71  Form CO, paragraph 204.  
72  Form CO, paragraph 99.  
 
15 4.4.1.2.  Commission’s assessment  
(85) The Commission has not previously examined the relevant market for filters as 
components for mobile network equ ipment.73 
(86) The results of the market investigation suggest that filters constitute a separate 
product market, distinct from other RAN equipment  components.74 A majority of the 
respondents consider that filters are distinct from other components of the RAN 
equipment and therefore belong to a separate product market.75   
(87) Moreover, t he market investigation confirms that no further sub -segmentation of the 
possible market for filters is necessary . 76 
(88) Therefore, the Commission concludes that filters constitute a se parate product 
market distinct from other RAN equipment components.  
4.4.2.  Geographic market definition  
4.4.2.1.  Notifying Party’s views  
(89) The Notifying Party refers to the Commission decision in Nokia/Alcatel Lucent77 
according to which the relevant geographic market for RAN equipment is at least 
EEA -wide, if not global (as discussed in paragraph (25)). The Notifying Party 
submits that the same market dynamics apply to filters, which are RAN equipment 
components.  
(90) The Notifying Party submits that the Commission does not have to conclude on the 
exact geographic market definition as the Transaction does not raise any competition 
concerns under any plausible market definition.  
4.4.2.2.  Commission’s assessment  
(91) A majority of responde nts to the market investigation indicate that they supply 
and/or procure filters on a global basis , with the main suppliers being based in 
Europe, USA and Asia .78  
(92) In any event, for the purpose of this decision, the exact geographic market definition 
for the supply of filters can be left open, as the Transaction does not raise serious 
doubts as to its compatibility with the internal market regardless of whether the 
market is EEA -wide or global . 
                                                 
73  Previous Commission decisions do not examine or specify whether filters are a part of the RAN 
equipment market or constitute a separate product market (see Commission decision of 24 July 2015 in 
case M.7632 - Nokia/Alcatel -Lucent; Commission decision of 22 June 2015 in case M.7563 - 
CommScope/TE BNS; Commission decision of 2 March 2011 in case M.6095 - Ericsson/Nortel Group 
(MSS & Global Services); Commission decision of 18 January 2011 in case M.6007 - Nokia Siemens 
Networks/Motorola Network Business).   
74  Q1, replies to questions 19 and 20;  Q2, replies to questions 17 and 18; Q3, replies to questions 18 and 19.  
75  Q2, replies to question 17; Q3, replies to question 18.  
76  Q1, replies to questions 19 and 20;  Q2, replies to questions 17 and 18; Q3, replies to questions 18 and 19.  
77  Commission decision of 24 July 2015 in  case M.7632 - Nokia/Alcatel -Lucent, paragraphs 19 -24. 
78  Q1, replies to questions  24; Q2, replies to question s 23; Q3, replies to question s 23.  
 
16 5. COMPETITIVE ASSESSMEN T 
(93) Ericsson and Kath rein’s  activities do not lead to a ny horizontal overlap. The 
Transaction creates a number of non-horizontal , i.e. conglomerate and vertical 
relationships . These relationships are examined in Sections 5.2 and 5.3 below, after a 
presentation of Ericsson and Kathrein’s  market shares in Section 5.1.  
5.1. Market shares  
(94) According to the Non-Horizontal Merger Guidelines, market shares and 
concentration levels provide useful first indications of the market structure an d of the 
competitive importance of both the merging parties and their competitors.79  
5.1.1.  Market shares methodology  
(95) With regard to RAN equipment , the Notifying Party provided value -based market 
share estimates based on information from Dell’Oro Group80. According to the 
Notifying Party, t hese estimates  are based on reported and estimated RAN 
equipment manufacturers’ revenues.81  
(96) With regard to passive antennas and filters , the Notifying Party estimates  the size of 
the respective market s on the basis of MNOs ’ purchasing volumes.  The Notifying 
Party  thus estimated  the market size  by using indicators, including capex forecasts 
by the top MNOs, publications by operators on expansion plans, information on 
spectrum auctions, analyst data on sold radio units and antenna market forecasts 
(especially EJL Wireless Report82). 
(97) The Notifying Party estimated market shares by value for passive antennas and 
filters on the basis of the price paid by MNOs for the respective products . Market 
share estimates correspond to merchant sales, i.e., exclude internal sales within the 
differen t branches of integrated companies which have both antenna and radio 
manufacturing capabilities.  
(98) Market share estimates presented in Sections 5. 1.3. and 5. 1.4. below  thus take into 
account all possible sales channels for passive antennas and filters, name ly (i) direct 
sales to MNOs , (ii) sales to RAN equipment suppliers which then resell these 
antennas/filters , possibly  as part of a turnkey solution , and (iii) sales to other sales 
partners, such as distributors .83  
(99) With regard to antenna modules and active antennas , the Notifying Party submits 
that there are no publicly available market reports which would allow the estimation 
                                                 
79  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings ("Non -Horizontal Merger Guidelines") , OJ C 265, 18.10.2008, 
paragraph 24.  
80  Form CO, Annexes 6.D.III.1 -6.D.III.5, Market data Dell’Oro Group.  
81  Market shares for RAN equipment do not include sales of passive antennas, filters and other on -site 
equipment which is merely re -sold by RAN equipment suppliers.    According to the Notifying Party, even 
if such sales were to be considered, this would not materially change the reported market shares due to the 
marginal value of p assive antennas and filters as compared to RAN equipment. See Notifying Party’s 
Reply to RFI 7 of 25 July 2019, question 16.  
82  Form CO, Annex 6.D.II.1, Market data EJL Wireless.  
83  Notifying Party’s Reply to RFI 7 of 25 July 2019, question 15.  







 
24 5.2. Conglomerate  assessment  
5.2.1.  Analytical framework  
(137)  According to the Non -Horizontal Merger G uidelines , in most circumstances, 
conglomerate mergers do not lead to competition problems.99  
(138)  However, foreclosure effects may arise when the combination of products in related 
markets may confer on the merged entity the ability and incentive to leverage a 
strong market position from one m arket to another closely related market by means 
of tying or bundling or other exclusionary practices. The Non -Horizontal Merger 
Guidelines distinguish between bundling , which usually refers to the way products 
are offered and priced by the merged entity100 and tying, usually referring to 
situations where customers that purchase one good (the tying good) are required to 
also purchase another good fro m the producer (the tied good).  
(139)  Tying and bundling as such are common practices that often have no anticompet itive 
consequences. Nevertheless, in certain circumstances, these practices may lead to a 
reduction in actual or potential rivals’ ability or incentive to compete. Foreclosure 
may also take more subtle forms, such as the degradation of the quality of the 
standalone product.101 This may reduce the competitive pressure on the merged 
entity allowing it to increase prices.102 
(140)  In assessing the likelihood of such a scenario, the Commission examines, first, 
whether the merged  firm would have the ability to foreclose i ts rivals,103 second, 
whether it would have the economic incentive  to do so104 and, third, whether a 
foreclosure strategy would have a significant detrimental effect on  competition, thus 
causing harm to consumers .105 In practice, these factors are often examined  together  
as they are closely intertwined . 
(141)  In order to be able to foreclose competitors, the merged entity must have a 
significant degree of market power, which does not necessarily amount to 
dominance, in one of the markets concerned. The effects of bundl ing or tying can 
only be expected to be substantial when at least one of the merging parties’ products 
is viewed by many customers as particularly important and there are few relevant 
alternative s for that product.106 Further, for foreclosure to be a potenti al concern, it 
must be the case that there is a large common pool of customers, which is more 
likely to be the case when the products are complementary.107 Finally, bundling is 
                                                 
99  Non-Horizontal Merger Guidelines, paragraph 92.  
100  Within bundling practices, the distinction is also made between pure bundling and mixed bundling. In the 
case of pure bundling the products are only sold join tly in fixed proportions. With mixed bundling the 
products are also available separately, but the sum of the stand -alone prices is higher than the bundled 
price.  
101  Non-Horizontal Merger Guidelines, paragraph 33.  
102  Non-Horizontal Merger Guidelines, paragraph 93.  
103  Non-Horizontal Merger Guidelines, paragraphs 95 to 104.  
104  Non-Horizontal Merger Guidelines, paragraphs 105 to 110.  
105  Non-Horizontal Merger Guidelines, paragraphs 111 to 118. 
106  Non-Horizontal Merger Guidelines, paragraph 99.  
107  Non-Horizontal Merger Guidelines, paragraph 100.  
 
25 less likely to lead to foreclosure if rival firms are able to deploy effective an d timely 
counter -strategies, such as single -product companies combining their offers.108 
(142)  The incentive to foreclose rivals through bundling or tying depends on the degree to 
which this strategy is profitable.109 Bundling and tying may entail losses or foregone  
revenues for the merged entity.110 However, they  may also allow the merged entity 
to increase profits by gaining market power in the tied goods market, protecting 
market power in the tying good market, or a combination of the two.111  
(143)  It is only when a suffic iently large fraction of market output is affected by 
foreclosure resulting from the concentration that the concentration may significantly 
impede effective competition. If there remain effective single -product players in 
either market, competition is unli kely to deteriorate following a conglomerate 
concentration.112 The effect on competition needs to be assessed in light of 
countervailing factors such as the presence of countervailing buyer power or the 
likelihood that entry would maintain effective competit ion in the upstream or 
downstream markets.113 
5.2.2.  Affected markets  
(144)  The Transaction may have a significant impact within the meaning of Section 6.4 of 
the Form CO in relation to  the supply of RAN equipment and the supply of both 
passive antennas (Section 5.2.3) and filters (Section 5.2.4), the latter products being 
required by MNOs in addition to RAN equipment in order to deploy mobile 
networks. 114 
5.2.3.  Passive antennas  and RAN equipment  
(145)  Kathrein's passive antennas are complementary to the RAN equipment supplied by 
Ericsson, these products consisting in different components necessary to build 
mobile networks.  The Transaction thus creates a conglomerate relationship between 
the activities o f Ericsson and Kathrein . 
(146)  Passive antennas are procured by MNOs either (i) directly from antenna 
manufacturers, or (ii) indirectly, via a bundle sold by RAN equipment suppliers 
consisting of passive antennas and other RAN equipment  components . This bundle 
constitutes what is designated in the industry as  a "turnkey solution ". 
                                                 
108  Non-Horizontal Merger Guidelines, paragraph 103.  
109  Non-Horizontal Merger Guidelines, paragraph 105.  
110  Non-Horizontal Merger Guidelines, paragraph 106.  
111  Non-Horizontal Merger Guidelines, paragraph 108.  
112  Non-Horizontal Merger Guidelines, paragraph 113.  
113  Non-Horizontal Merger Guidelines, paragraph 114.  
114  In th e Form CO, the Notifying Party also provides an analysis on  why the relationship between the 
markets for the supply of passive antennas and RAN equipment does not lead to anticompetitive  vertical 
effects  (see Form CO, paragraphs 165 to 178). The Commission notes that passive antennas and other 
RAN equipment compon ents are complementary products and are not vertically related, in the sense that 
they are not situated at different levels of the supply chain . Therefore, the Commission does not carry out 
a separate analysis of  potential vertical effects arising from the  Transaction in this regard. In any event , 
similar considerations would apply in the context of an assessment of vertical effects  as those set out in in 
Sections 5.2.3 and 5.2.4  below .  
 
26 (147)  The Commission examined whether the Transaction could give rise to conglomerate 
non-coordinated effects consisting of the potential foreclosure of suppliers of passive 
antennas that com pete with Kathrein , and/or the potential foreclosure of suppliers of 
RAN equipment that compete with Ericsson  as a result of the implementation of a 
conglomerate strategy by the merged entity . 
(148)  A possible practice that could potentially  lead to conglomerate  effects is mixed 
bundling.115 Post-Transaction, t he merged entity could attempt to reduce its 
competitors’ ability to compete by offering its bundled sales of passive antennas and 
RAN equipment to MNOs at a price lower than the sum of the standalone prices  for 
these products .116 In doing so, or even independently thereof, the merged entity may 
reduce its passive antenna sales to competing non -integrated RAN equipment 
suppliers.  Such practices  could potentially  lead to the anticompetitive 
marginalization of riv als selling standalone components (i.e., non -integrated 
competitors ) and to consumer harm, if the bundled offer was not replicable and the 
bundling strategy diverted sufficient demand from non -integrated rivals  so as  to 
make them unable to compete effectively . 
5.2.3.1.  Notifying Party’s view  
(149)  The Notifying Party considers that conglomerate effects are unlikely  for the  
following  reasons.  
(150)  First, the Notifying Party submits that the merged entity would not have the 
technical ability to increase its bundled sales. According to the Notifying Party, the 
choice between purchasing passive antennas on a standalone basis from antenna 
suppliers or a s part of a (bundled) turnkey solution is made by MNOs,  which specify 
in their tenders whether they prefer being  offered bundles ( generally for commercial 
reasons) or standalone components. S uppliers  thus offer their products in a bundled 
or standalone man ner depending on the specific requirements set out  by MNO 
customers. MNOs thus have a strong countervailing buyer power and are unlikely to 
be influenced in their procurement decision in this regard .117 
(151)  Second, the Notifying Party points out that n either Eri csson nor the Target Business 
have a significant competitive position in any plausible  relevant  market. In 2018, 
Kathrein’s estimated market shares for passive antennas are below 20% on any 
plausible market segment (down from over [40-50]% in the EEA in 2015 ) and 
Ericsson’s estimated market share in RAN equipment is about [30-40]% both on a  
worldwide basis and in the EEA . Ericsson’s market share is only higher, albeit 
below [40-50]%, for 2G and 3G technology. According to the Notifying Party, 
neither Eric sson’s RAN equipment nor Kathrein’s passive antennas are viewed as 
                                                 
115  Other possible practices, which could potentially  have anticompetit ive effects, are pure bundling or tying 
as well as a degradation of interoperability. However, these practices are not plausible in the context of 
passive antennas, as  explained in the assessment in paragraphs (181) and (171) respectively. Therefore, 
Secti on 5.2.3. mainly focusses on mixed bundling . 
116  Pre-Transaction, while Ericsson offers b undles of passive antennas and RAN equipment, [terms and 
conditions].  
117  Form CO, paragraph 184 and 199.  
 
27 particularly important and several credible alternative suppliers with a comparable 
product offering  will remain on the market .118  
(152)  Third, the Notifying Party explains that competing RAN equi pment suppliers and 
antenna manufacture rs will continue to effectively compete with the merged entity  
even in the event that it sold passive antennas as a bundle together with RAN 
equipment. RAN equipment suppl iers will be able to replicate t urnkey solutio ns 
offered by the merge d entity: (i) Huawei and Nokia alread y have in -house passive 
antenna capa bilities  and (ii) o ther RAN equipment suppliers, such as Samsung and 
ZTE, already source passive antennas from t hird parties in order to offer t urnkey 
solutions .119 According to the Notifying Party, there will remain a sufficient number 
of alternative antenna suppliers after the Transaction. Standalone antenna suppliers 
will thus continue to sell passive antennas to competing RAN equipment suppliers 
and directly to MNOs and will therefore continue to have a large enough pool of 
customers.120 
(153)  Fourth, the Notifying Party submits that MNOs can easily switch suppliers of RAN 
equipment and passive antennas and multi -source from various manufacturers.121  
(154)  The Notifying Party submits that the merged entity will in any case not have the 
incentive to push for an increase in its bundled sales or to tie its sales of RAN 
equipment and passive antennas. It submits that passive antennas have a low value 
compared to other RAN equipment  components, in particular the baseband and the 
radio. Therefore, a bundling strategy risking losing MNO customers would not be 
profitable.122  
(155)  Overall, the Notifying Party submits that the Transaction will not result in any 
significant reduction of sales by  competitors that offer products on a stand -alone 
basis.  In the first place , MNOs will continue to determine their own procurement 
strategy. In the Notifying Party's view, MNOs co uld not be forced by a bundling 
strategy to purchase a turnkey solution that they would not believe optimal for their 
needs.  In the second place , passive antenna manufacturers will continue to supply 
both MNOs and RAN equipment suppliers which will enable the latter to also  offer 
turnkey solution to MNOs.123  
5.2.3.2.  Commission’s assessment  
(156)  The Commission considers that  the merged entity will not have the ability and 
incentive to foreclose non-integrated competitors by bundling its sales of passive 
antennas and other RAN equipment componen ts. Even if the merged entity engage d 
in a strategy to  foreclose rivals though bundling or tying , such  strategy would not 
have a significant detrimental effect on competition . 
 
                                                 
118  Form CO, paragraphs 193 to 194.  
119  Form CO, paragraph 185 to  189. 
120  Form CO, paragraph 190.  
121  Form CO, paragraph 192.  
122  Form CO, paragraphs 195 to 197.  
123  Form CO, paragraph 198 to 200.  
 
28 As regards ability  
(157)  First, the Commission considers that the merged entity does not have  a sufficient 
degree of market power  to leverage its position in the supply of passive antennas or 
in the supply of RAN equipment to foreclose non -integrated competitors active in 
these markets.  
(158)  With regard to RAN equipment, the market shares presented in Section 5. 1.2. do not 
suggest that E ricsson has significant market power. In an overall market for the 
supply of RAN equipment, Ericsson 's market share is about [30-40]% both on a 
worldwide level and at EEA level in 2018. If the market for RAN equipment is 
further segmented by technology sta ndards, Ericsson 's market share is about [40-
50]% in 2018 in 2G and 3G technology  both on a worldwide level and in the  EEA. 
Its market share for the more recent 4G technology remains below 30%. If the 
market for RAN eq uipment is further segmented between m acro and small cells , 
Ericsson’s  market share is [30-40]% in the possible segment for macro -cell RAN 
equipment in 2018 and [30-40]% in the possible segment for small cells for 5G 
technology in 2018 ; however, more recently it s market share decreased to [20-30]% 
in the latter segment. For all other segments and years, Ericsson’s market share 
remain s below 30%.  In addition, Ericsson’s market position has remained stable  
over the period 2015 to 2018.  
(159)  Irrespective of the precise segmentation of the market for RAN equipment, in 2018 
Ericsson is the [market position]  RAN equipment supplier  (except for legacy 
technologies 2G and 3G in the EEA, [market position] ). Ericsson’s main competitors 
are Huawei (the market leader) and Nokia. Samsung and ZTE are also significant 
competitors. Ericsson also faces s maller competitors , namely  Airspan, Cisco, Fujitsu 
and NEC.  
(160)  The results of the market investigation confirm that Ericsson is unlikely to have a 
significant deg ree of market power. The majority of antenna manufacturers, RAN 
equipment suppliers and MNOs that respond ed to the market investigation consider 
that Ericsson ’s RAN equipment product portfolio is comparable to the products of 
other RAN equipment suppliers in terms of quality, performance and price .124 This 
result supports the notion that Ericsson faces significant competitors that present 
credible alternatives to MNOs.  
(161)  With regard to passive antennas, similarly, market shares presented in Section 5. 1.3. 
do no t suggest that Kathrein has market power.125 In 2018, Kathrein is the [market 
position]  supplier of passive antennas both on a worldwide basis and in the EEA 
with a market share of [5-10]% and [10-20]%, respectively. Notably, Kathrein’s 
market position has [market position]  over the period 2015 to 2018 , as explained in 
Section 5.1.3 . Kathrein  thus faces significant competitive constraints from suppliers 
with material market shares like  Commscope, Huawei  or Comba . 
(162)  The results of the market investigation confirm that Kathrein is not a particularly 
important competitor in the supply of passive antennas and that there are several 
                                                 
124  Q1, replies to question  31; Q2, replies to question  31; Q3, replies to question  29. 
125  As explained in paragraph s (245) to (249), Kathrein does also not have significant market power with 
regard to antenna modules. Therefore,  Kathrein would equally not have significant market power in a 
potential broader market encompassing passive antennas and antenna modules.  
 
29 credible alternative suppliers . The majority of antenna manufacturers, RAN 
equipment suppl iers and MNOs that responded to the market investigation consider 
that Kathrein’s passive antenna offering is comparable with the products of other 
antenna manufacturers in terms of quality, performance and price.126 
(163)  MNOs confirm  that they procure passive an tennas from several  different suppli ers. 
Besides Kathrein, MNOs generally list Huawei, Commscope, Comba and Amphenol 
as their top passive antenna  suppliers .127 According to the Notifying Party, Comba  
was able to  improve the quality of its products significan tly in the past few years, 
[supplier information] .128 Other antenna manufacturers frequently mentioned by 
market participants  as credible alternatives  are CellMax, Mobi, RFS, Rosenberger, 
Tongyu and Wi -com.129 One MNO summarizes the supply situation as follows : 
"There are more than 10 main passive antenna manufacturers, and an uncertain 
number of small manufacturers over the world. "130  
(164)  In the course of the market investigation, only one MNO submit ted a different view 
and considered that Kathrein offers unique pr oducts in terms of quality, price and 
innovation .131,132 This respondent indicated that, even if  Huawei 's passive antennas  
are comparable to Kathrein’s  products , however, Huawei is not an independent 
antenna supplier.  
(165)  However, this view is at odds with Kathrein's current market position and [market 
position]  over the past few years. Moreover, these comments are inconsistent with 
the majority view expressed by other MNOs and respondents to the market 
investigation. With respect to  Huawei , although the company appears to 
predominately sell passive antennas to MNOs ( on a standalone  basis  or as part of 
turnkey solutions ), the Commission notes that Huawei also generated  sales to  RAN 
equipment suppliers , albeit in more limited  volumes . [business relationship] .133 
(166)  Respondents to the market investigation also explain  why, in their view , Kathrein 
has [market position]  market shares over the last few years. According to several 
respondents, the quality of Kathrein 's product is on par  with that of the other  main 
suppliers, but its prices  are generally higher, making Kathrein less  competitive.134 
[internal documents] . On a quarterly basis, Kathrein receives written feedback from 
Ericsson on its performance  as a supplier . In a 2018 report,  Ericsson  thus describe d 
Kathrein's commercial position as " [supplier information] ".135  
                                                 
126  Q1, replies to question 3 0; Q2, replies to question 3 0; Q3, replies to question 28 . 
127  Q3, replies to question 26.1.  
128  Form CO, paragrap h 123.  
129  Q2, replies to question 25.1.  
130  Q3, repl y of Telefónica  to question 36.1.  
131 Q3, reply of Deutsche Telekom to question 28 .1. 
132  Notably, this MNO also underlined Kathrein’s unique offer for indoor solutions and industrial applications 
(e.g. for trains and tunnels). However, as explained by the Notifying Party, Kathrein Group’s product 
portfolio of antennas for special purpos e deployments  is not part of the Transaction. See paragraph (4);  
Notifying Party’s Reply to RFI 9 of 6 August 2019, question 8.  
133  Notifying Party’s Reply to RFI 7 of 25 July 2019, question 1 and Notifying Party's Reply to RFI 9 of 6  
August 2019, question  3; Notifying Party’s Reply to RFI 11 of 15 August, question 1.  
134  Q2, replies to question 30.1 and 37.1.  
135  Notifying Party's Reply to RFI 9 of 6  August 2019 , question 5 . 
 
30 (167)  Second, the Commission notes that the merged entity is unlikely to be able to 
significantly increase its (bundled ) sales of passive antennas and RAN equipment 
post-Tran saction in light of MNOs’ demand patterns . 
(168)  In the first place, the results of the market investigation confirm that MNOs procure 
passive antennas both directly from antenna manufacturers and from RAN 
equipment suppliers. Based on the responses to the market investigation, the 
proportion of passive antennas purchased on a standalone basis is  estimated to be at 
least 50% market -wide, however with significant variation across MNO s.136 
(169)  According to MNOs, the advantages of purchasing  turnkey solu tions are: (i)  bundle  
discounts , (ii) one -stop-shopping and reduced coordination efforts from an 
operational perspective, and (iii) RAN equipment suppliers taking the responsibility 
for the installation and integration of the passive antenna into the RAN equipment  
and e nsuring the compatibility and interoperability of all components used across the 
mobile network . However, MNOs also  indicate that  purchasing turnkey solutions  
entails several disadvantages, namely : (i) higher and/or hidden costs (e.g. service 
fees) , (ii) less freedom and control in the select ion of the  best components and their 
network integration , and (iii) increased dependency on a single RAN equipment 
supplier.137 Overall, it appears that the more price -sensitive MNOs tend to negotiate 
with antenna manufacturers directly  when procuring passive antennas  on a 
standalone basis .138 For o ther MNOs , the main reason for procuring passive antennas 
on a standalone basis is to keep a better control of the design and deplo yment of their 
mobile networks, including by testing and integrat ing passive antennas 
themselve s.139 
(170)  The results indicate that MNO s assess the costs and benefits of both options , i.e. to 
opt for a standalone or turnkey solution , on a  case-by-case basis .140 An MNO 
explains that it is pro -actively increasing its share of standalone passive antenna 
purchases after an integrated RAN equipment supplier had increased its share of 
bundled sales by granting vouchers for passive antennas.141 This MNO thus 
developed a counter -strategy in order to effectively avoid being dependent on an 
integrated supplier.  
(171)  The results of the market investigation also confirm that mixing-and-match ing 
passive antennas and RAN equipment from  different  vendor s presents no 
interoperability i ssues to MNOs. This is because the integration of passive antennas 
in RAN equipment is governed by established, market -wide interoperability 
standards (i.e.,  the 3rd Generation Partnership Project ("3GPP") standard ).142,143 The 
                                                 
136  Q3, replies to question 27.  
137  Q2, replies to question 32; Q3, replies to question 30.  
138  Minutes of the call of 29 May 2019 with Comba, paragraph  5.  
139  Minutes of the call of 5 June 2019 with Commscope, paragraph 9.  
140  Q3, repl ies to question 30.  
141  Q3, reply of Deutsche Telekom to question 27.1.  
142  Q3, replies to question 30.2.  
143  Given the existence of established, market -wide interoperability standards governing the integration of 
passive antennas and other RAN equipment components, the Commission notes that the merged entity 
would not be able to degrade interoperability,  for instance, by selectively improving the interoperability 
between Ericsson and Kathrein products, while degrading the interoperability of the merged entity’s 
products with third party products. The Commission has not received any  indication from market players 
 
 
31 combination  of passive antennas and RAN equipment takes place by connecting the 
antenna with a standardized connector via a high frequency coax cable, which 
transports the analogue signal to the passive antenna. In each case, the standards for 
the control and monitoring interface between  a base station and a variety of tower -
top equipment are observed.144 
(172)  Accordingly,  although MNOs recognize that any infrastructure exchange causes 
some switching costs , for instance in terms of  the testing  of new components,  
switching between different passive antenna suppliers is technically  and 
commercially possible.145 MNO s confirm that switching between suppliers is easy as  
passive antennas are commoditised products that are interoperable with any RAN 
vendor’s equipment .146 
(173)  In the second place, MNOs  that responded to the market investigation confirm that 
they multi -source passive antennas and generally work with more than two  different 
suppliers  at the same time .147  
(174)  Besides the advantage of being less dependent on a single  supp lier, multi -sourcing is 
required as antenna specifications  differ across mobile network sites . Therefore, 
even an integrated  RAN equipment supplier would be unlikely to hold an  antenna 
portfolio cover ing all types of passive antennas and  would need to p rocure certain 
types from third -party suppliers.148 Thus, an  antenna manufacturer explain ed in the 
course of the market investigation  that it  continues to sell passive antennas to 
integrated RAN equipment suppliers , such as  Nokia  or Huawei.149  
(175)  In the third  place, while respondents to the market investigation consider that the 
merged entity may have the technical ability  to respond to a RFQ for a standalone 
RAN equipment solution with a bundled offer ( to the extent that such an offer would 
be permissible under  the relevant tender rules ), there are mixed views as to whether 
the merged entity would be successful i n increasing its bundled sales  after the 
Transaction .150 MNOs indicate that  they will remain in control of  their procurement 
strategy. For instance, one MN O explains that , when selecting passive antennas and 
RAN equipment,  “it considers all relevant factors such as quality/performance, 
price and maintaining a balance between different vendors on the market ”.151  
(176)  In contrast to MNOs, most antenna manufacturers and RAN equipment supplier s 
believe that the merged entity will be able to increase its bundled sales and divert 
demand away from standalone suppliers.152 However, only few respondents believe 
                                                                                                                                                      
that such a strategy would be likely; rather, market players unanimously confirm the relevance of the 
existing interoperability  standards with regard to passive antennas.  
144  Form CO, paragraph 27.1.  
145  Q3, rep lies to question 31.  
146  Q3, replies to question 31.1.  
147  Q2, replies to question 26.1 and 36.1.  
148  Minutes of the call of 29 May 2019 with Comba, paragraph 5.  
149  Minutes of the call of 29 May 2019 with Comba, paragraph 4 .  
150  Q1, replies to question 35; Q2, replies to question 35; Q3, replies to question 32.  
151  Q3, re ply of Deutsche Telekom to question 32.1.  
152  Q1, replies to question 37; Q2, replies to question 37.  
 
32 that such  an increase would have a negative impact on competition  and make it more 
difficult for stand -alone players to compete.153  
(177)  Third,  the Commission notes that non -integrated competitors have effective and 
timely counter -strategies  available in order to be able to effectively  compete with the 
merged entity  in the ev ent of a potential foreclosure strateg y by the merged entity . 
(178)  The maj ority of antenna manufacturers, RAN equipment suppliers and MNOs that 
respond ed to the market investigation consider that standalone antenna 
manufacturers and RAN equipment suppliers will  have the ability to replicate 
turnkey solution s offered by the merged entity.154 Several a ntenna manufacturers 
explain that standalone competitors already team up , for instance  against the 
integrated player Huawei , and that RAN equipment suppliers can purchase passive 
antennas from several sources  for their turnkey solutions.155 Overall, the results 
indicate  that the partnership model is how the majority of RAN equipment suppliers 
currently operate s. All RAN equipment suppliers seem to collaborat e with an tenna 
manufacturers and offer bundles or could enter into such partnerships.156  
(179)  Only a few respondents  are concerned  that while the Parties' competitors  may have 
the technical ability to  replicate the merged entity’s t urnkey solution through 
partnerships, non-integrated  players would not be as competitive as the merged 
entity. In particular, they  submit that non -integrated players will not be able to 
replicate the merged entity's bundle discount. Moreover, t hey are concerned  that 
standalone antenna manufactu rers may become less competitive due to the reduced 
demand post -Transaction.157 However, these concerns are not consistent with the 
fact that non -integrated players are already competing effectively with integrated 
players pre -Transaction.  
(180)  Moreover, MNOs consider that post -Transaction there will remain  a sufficient 
number of alternative antenna manufacturers and RAN equipment suppliers such 
that MNOs can continue purchasing these components on a standalone basis , even if 
the merged entity were to tie its p assive antenna and RAN equipment sales .158 With 
regard to RAN equipment suppliers, the results  of the market investigation  confirm 
that the Transaction would leave  the number of suppliers unaffected and that 
customers currently purchasing RAN equipment on a standalone  basis expect to  be 
able to do so  post-Transaction.159 
As regards incentives  
(181)  In light of the foregoing, the merged entity is unlikely to have an incentive to engage 
in a pure bundling or tying strategy. As explained in paragraph (168), a significan t 
share of MNOs is not interested in buying turnkey solutions, but instead prefers to 
buy passive antennas and RAN equipment on a standalone basis. If the merged entity 
were to pursue a pure bundling or tying strategy, it would risk losing the sales from 
                                                 
153  Q1, replies to question 37 .1 and 38 .1; Q2, replies to question 37 .1. 
154  Q1, replies to question 40; Q2, replies to question 40;  Q3, replies to question 35.  
155  Q1, replies to question 40.1.  
156  Q2, replies to question 40.1; Q3, replies to questions 32.1 and 32.2.  
157  Q1, replies to question 40.1. ; Q2, replies to question 40.1; Q3, replies to question 35.1.  
158  Q3, rep lies to question 36 and 37.  
159  Q3, replies to  question 37.1.  
 
33 customers who prefer to mix -and-match and purchase only passive antennas or only 
RAN equipment from the merged entity together with the standalone product of 
another supplier. A share of these customers may decide to cease  purchasing these 
products from the  merged entity.  
(182)  In this context, it is also relevant to mention that the value of passive antennas is 
significantly lower than the value of the other RAN equipment components.160 The 
Notifying Party estimates that passive antennas represent around [5-10]% of the 
RAN equipment value.161 Respondents to the market investigation unanimously 
confirm  that passive antennas represent only a small portion of the overall value of 
the RAN equipment, even in case of a complex multi -band  antenna. Therefore, it is 
very unlikely that Ericsson would be willing to forego sales of RAN equipment in 
order to gain market shares on the market for the supply of passive antennas where 
turnover and profits are more modest.  Vice versa, it is very unlikely that Ericsson 
would be able to  convince MNO customers to buy a bundle consisting of passive 
antennas and RAN equipment, if such customers were looking to buy passive 
antennas on a standalone basis.  
(183)  It also appears unlikely that the merged entity will have the incentive to foreclose 
rivals though a mixed bundling strategy  and/or through the reduction of passive 
antenna sales to non -integrated competitors . 
(184)  First, t he majority of antenna manufacturers and RAN equipment suppliers  that 
responded to the market investigation considers  that the  merged entity will have an 
incentive to  increase its bundled sales.162 Respondents indicate that Ericsson will 
have the option  of either selling passive antennas and RAN equipment at market 
rates , thus gaining the antenna margin as part of the company 's profit, or offering a 
bundle at a reduced price to increase it s sales and gain market share. Nevertheless, 
MNOs  cast doubt that the merged entity will have an incentive to expand bundled 
sales by pointing  to the fact that Ericsson  already  has an agreement wit h Kathrein to 
distribute  antennas and could already today offer commercial advantages  to 
customers purchasing a turnkey solution  as opposed to purchasing components in a 
standalone form .163  
(185)  Second, in its assessment of the likely incentives of the merged firm, the 
Commission may take into account factors such as , inter alia, the type of strategies 
adopted  on the market in the past or the content of internal documents .164  
(186)  With respect to past strategies adopted on the market, respondents to the market 
invest igation indicate that Huawei , which is already integrated, employs a mixed 
bundling strategy offering bundles at a reduced price.165 Therefore,  a number of 
respondents are concerned that, assuming  that the merged entity would increase 
bundled sales to MNOs  as a result of the Transaction , it may at the same time have 
an incentive to decrease its passive antenna sales to competing RAN equipment 
suppliers (for commercial or technical reasons, such as capacity constraints). This 
                                                 
160  Q1, replies to question 36.2; Q2, replies to question 36 .2. 
161  Form CO, paragraph 173.  
162  Q1, replies to question 36; Q2, replies to question 36.  
163  Q3, replies to question 33.1.  
164  Non-Horizontal Merger Guide lines, paragraph 109.  
165  Q1, replies to question 37.1; Q2, replies to question 38. 1; Q3, replies to question 33.1.  
 
34 would be in li ne with Huawei’s str ategy to only h ave limited pass ive antenna sales to 
competing RAN equipment  suppliers .166   
(187)  [reference to internal documents on post -Transaction business strategy]167   
(188)  It follows that, on balance, the merged entity is unlikely to have the incentive to 
foreclose rivals through bundling , tying  or other exclusionary strategies . 
As regards effects  
(189)  Even if the merged entity engaged in a mixed bundling strategy  or other 
exclusionary strategy , for all the reasons set out in paragraphs ( 157)-(180), such 
strategy would be unlikely to result in a significant reduction of sales prospects by 
standalone rivals in the market leading to a reduction in rivals’ ability or incentive to 
compete.   
(190)  The implementation of  a mixed bundling strategy  may potentially lead to  (i) a 
reduction of  Ericsson 's procurement of passive antennas from third parties  and (ii) a 
reduction of Kathrein 's passive antenna s ales to third parties.  
(191)  With regard to the first effect, the Commission notes that , before the Transaction,  
Erics son’s position  as customer for other standalone antenna manufacturers is 
limited.  According  to the results of the market investigation , Ericsson represents less 
than 10% of most antenna manufacturers ’ sales of passive antennas. Ericsson 
represents between 10% and 30% of passive antenna sales  of only two antenna 
manufacturers .168 Moreover, several passive antenna suppliers indicate that they 
would be able to start selling  or increase their sales to custom ers other than 
Ericsson .169 
(192)  In any event , as explained in paragraph ( 174), an integrated RAN equipment supplier 
is likely to continue to procure passive antennas from a range of different suppliers. 
[business strategy] .170 [business strategy] . According to Eri csson, t his is due to the 
need to fulfil specific requests from customers who prefer to multi -source and 
procure passive antennas from a number  of different suppliers . [business strategy] .171 
[business strategy] .172 
(193)  With regard to the second effect, the Commis sion notes that Kathrein’s position  as 
supplier to standalone RAN equipment manufacturers is fairly limited pre -
Transaction. According to the results of the market investigation, Kathrein represents 
less than 10% of other RAN equipment su ppliers’ passive antenna purchases (in 
order for them to offer turnkey solutions  to MNOs) .173 Moreover, several RAN 
equipment suppliers indicate that they would be able to start sourcing  or increase 
                                                 
166  Notifying Party’s reply to RFI 9 of 6 August 2019, question 3.  
167  [internal document s]. 
168  Q1, replies to question 27.  
169  Q1, replies to question 27.2.  
170  Notifying Party’s reply to RFI 9 of 6 August 2019, question 7.  
171  Form CO, paragraph 123.  
172  Notifying Party’s reply to RFI 9 of 6  August 2019, question 7. 
173  Q2, replies to question 37; Q3, replies to question 34.1.  
 
35 their purchases from antenna manufacturers other than Kathr ein.174 Consequently, 
even in the unlikely scenario that Ericsson would reduce its s ales of passive antennas 
to competing RAN equipment suppliers, this would not affect their ability to source 
passive antennas and, thus, they would continue to compete effect ively as suppliers 
of both stand -alone and turnkey solutions to MNOs.   
(194)  Moreover, for the reasons set out in paragraphs ( 167) to ( 176), the Commission does 
not expect that the Transaction will divert significant demand from standalone 
products to bundled sa les. In any case, the Parties’ non -integrated competitors are 
able to replicate the merged entity’s bundled offer as there remains a sufficient 
number of standalone players in  both markets.  
5.2.3.3.  Conclusion  
(195)  In light of the above considerations and based on the results of the market 
investigation, the Commission considers that the Transaction does not raise serious 
doubts as to its compatibility with respect to the relationship between the market for 
the supply of passive antennas and the market for the supply of  RAN equipment.  
5.2.4.  Filters  and RAN equipment  
(196)  Kathrein's filters are complementary to the RAN equipment supplied by Ericsson, all 
these products consisting in components necessary to build mobile networks.  The 
Transaction thus creates a conglomerate relations hip between Ericsson and Kathrein . 
(197)  Like passive antennas, filters are procured by MNOs either (i) directly from filter 
manufacturers, or (ii) indirectly, via a bundle sold by RAN equipment suppliers 
consisting of filters  and other RAN equipment  components as part of a turnkey 
solution.  
(198)  The Commission examined whether the Transaction could give rise to conglomerate 
effects consisting of the potential foreclosure of suppliers of filters that compete with 
Kathrein , and/or the foreclosure of supplie rs of RAN equipment that compete with 
Ericsson . 
5.2.4.1.  Notifying Party’s view  
(199)  The Notifying Party considers that conglomerate effects are unlikely for the 
following reasons.  
(200)  First, the Notifying Party submits that the merged entity would not have the 
technical a bility to increase its bundled sales  because, as described in relation to 
passive antennas, s uppliers  offer their products in a bundled or standalone manner 
depending on the specific requirements set out  by their  MNO customers. MNOs thus 
have a strong coun tervailing buyer power and are unlikely to be influenced in their 
procurement decision in this regard.175 
(201)  Second, the Notifying Party points out that n either Ericsson nor the Target Business 
have a significant competitive position in any conceivable relevant  market . In 2018, 
                                                 
174  Q1, replies to question 27.2.  
175  Form CO, paragraph 209.  
 
36 Kathrein’s estimated market share for filters remains  below 20%  (down from over 
[30-40]% in the EEA in 2016) and Ericsson’s estimated market share in RAN 
equipment is about [30-40]% both on a worldwide basis and in the EEA.   
(202)  Third, the No tifying Party explains that other RAN equipment suppliers and filter 
manufacture rs will continue to effectively compete with the merged entity even in 
the event that it sold filters  as a bundle together with RAN equipment. As for passive 
antennas, RAN equi pment suppliers will be able to replicate turnkey solutions 
offered by the merged entity , either relying on in -house filters capacities or 
procuring filters from alternative suppliers .176 Standalone filter manufacturers will 
thus continue to sell filters to competing RAN equipment suppliers and to MNOs 
directly and will therefore continue to have a large enough pool of customers . 
(203)  Fourth, the Notifying Party submits that MNOs can easily switch suppliers of RAN 
equipment and filters and multi -source from variou s manufacturers.177  
(204)  The Notifying Party submits that the merged entity will in any case not have the 
incentive to push for an increase in its bundled sales or to tie its sales of RAN 
equipment and filters. It submits that filters have a low value compared t o other 
RAN equipment components. Therefore, a bundling strategy risking losing MNO 
customers would not be profitable.178  
5.2.4.2.  Commission’s assessment  
(205)  The Commission considers that  the merged entity will not have the ability to 
foreclose non-integrated competito rs by bundling its sales of filters and other RAN 
equipment components . Even if the merged entity engage d in a strategy to foreclose 
rivals though bundling or tying , such strategy would not have a significant 
detrimental effect on competition . 
As regards ability  
(206)  First, the Commission considers that the merged entity does not have  a sufficient 
degree of market power  to leverage its position in the supply of filter s or in the 
supply of RAN equipment to foreclose non -integrated competitors active in these 
markets. 
(207)  With regard to RAN equipment, the Commission refers to paragraphs (157)-(160) 
above which set out why Ericsson is unlikely to have a significant degree of market 
power.  
(208)  With regard to filters, market shares presented in Section 5.1.4. do not suggest that 
Kathrein has market power. In 2018, Kathrein is the fifth largest supplier of filters on 
a worldwide basis with a [5-10]% market share and the third largest supplier in t he 
EEA with a [10-20]% market share.  Notably,  as explained in detail in Section 5.1.4,  
Kathrein’s market position has [market position]  over the period 2015 to 2018. 
Kathrein  thus faces  significant competition from the main market players, namely  
Commscope , Huawei, Comba, Mobi, Kaelus and Radio Design.  
                                                 
176  Form CO, paragraph 210. 
177  Form CO, paragraph 211.  
178  Form CO, paragraph 214.  
 
37 (209)  The results of the market investigation confirm that Kathrein is not a particularly 
important competitor in the supply of filters and that there are many credible 
alternative suppliers. A majority of filter  manufacturers, RAN equipment suppliers 
and MNOs that respond ed to the market investigation consider that Kathrein’s filter 
offering is comparable with the products of other filter manufacturers in terms of 
quality, performance and price.179 
(210)  MNOs confirm that they rely on several  different filter suppliers . Besides Kathrein, 
MNOs generally list Huawei, Commscope  and Radio Design as their top suppliers of 
filters .180 MNOs do not identify any relevant differences across filter manufacturers. 
A respondent thus expla ins that “most suppliers have a broad range of filters in their 
portfolios, i.e. there are no types of filters produced by Kathrein which are not also 
offered by competitors ”.181 One filter manufacturer explains that the filter market is 
characterized by a h igh level of customization ; however, this is not consistent with 
the majority view of other respondents to the market  investigation.182 
(211)  Second, the Commission notes that the merged entity is unlikely to be able to 
significantly increase its (bundled) sales o f filters and RAN equipment post -
Transaction in light of MNOs’ demand patterns , as set out for passive antennas in 
paragraphs ( 167)-(174). Compared to passive antennas, the results of the market 
investigation suggest that MNOs are even less likely to purchase bundles consisting 
of filters and other RAN equipment components  because filters are generally 
procured separately and represent a limited portion of the cost of the RAN 
equipment .183 A respondent  thus explained that  “[t]he filter market has a huge 
diversity and usually is not involved in the RAN process. Cost is residual comparing 
with the RAN .”184 Therefore, the filter and RAN equipment markets seem to be less 
closely related than the passive antenna and RAN equipment markets.  
(212)  Third , the Commission n otes that non -integrated competitors have effective and 
timely counter -strategies available in order to be able to effectively compete with the 
merged entity in the event of a potential foreclosure strategy by the merged entity.  A 
majority of respondents c onsider that standalone filter manufacturers will have the 
ability to compete with the merged entity , even in the event that it sold filter s as a 
bundl e together with RAN equipment .185 As explained in detail for passive antennas 
in paragraphs ( 177)-(180), standalone competitors can and do to some extent 
collaborate already pre -Transaction in order to offer bundled products and compete 
against integrated players.   
As regards incentives  
(213)  In light of the foregoing , the merged entity is unlikely to have an incentive to engage 
in a pure bundling or tying strategy. If the merged entity were to pursue a pure 
bundling or tying strategy, it would risk losing the sales from customers who prefer 
                                                 
179  Q1, replies to question 43; Q2, replies to question 43; Q3, replies to question 38.  
180  Q3, replies to question 26.1.  
181  Q3, reply of Vodafone  to question 38.1.  
182  Q1, repl y of Commscope  to question 45.1.  
183  Q3, replies to questions 39, 40.  
184  Q3, reply of Telefonica to question 40.1.  
185  Q1, replies to question 45; Q2, replies to question 45; Q3, replies to question 40.  
 
38 to mix -and-match filters and RAN equipment from different  supplier s. A share of 
these customers may decide to no longer purchase from the merged entity at all.  
(214)  In this context, it is also relevant to mention that the value of filters is significantly 
lower than the value of the oth er RAN equipment components. The Notifying Party 
estimates that filters represent around [0-5]% of the RAN equipment value.186 
Therefore, it is very unlikely that Ericsson would be willing to forego RAN 
equipment sales in order to gain market shares in filters where turnover and profits 
are more modest. Vice versa, it is very unlikely that Ericsson would be able to 
convince MNO customers to buy a bundle consisting of filters and RAN equipment, 
if such customers were looking to buy filters on a standalone basi s. 
(215)  With respect to mixed bundling, s everal market participants indicate that , in their 
view,  the merged entity will pursue a similar bundling strategy as for passive 
antennas and/or combine its bundling strategy by offering bundles consisting of 
passive an tennas, filters and other RAN equipment components.187  
(216)  As noted in paragraph s (181)-(188) with regard to passive antennas, it appears 
unlikely that the merged entity will have the incentive to foreclose rivals though a 
mixed bundling strategy  and/or through  the reduction of filter  sales to non -integrated 
competitors . [reference to internal documents on post -Transaction business strategy] . 
(217)  It follows that, on balance, the merged entity is unlikely to have the incentive to 
foreclose rivals through bundling or tying  or other exclusionary practices . 
As regards effects  
(218)  Even if the merged entity engaged in a mixed bundling strategy, for all the reasons 
set out in paragraphs ( 206)-(212), the Commission notes that such strategy is 
unlikely to result in a significant reduction of sales prospects by standalone rivals in 
the market leading to a reduction in rivals’ ability or incentive to compete.  
5.2.4.3.  Conclusion  
(219)  In light of the above considera tions and based on the results of the market 
investigation, the Commission considers that the Transaction does not raise serious 
doubts as to its compatibility with respect to the relationship between the market for 
the supply of filters and the market for  the supply of RAN equipment.  
5.3. Vertical  assessment  
5.3.1.  Analytical framework  
(220)  According to the Non -Horizontal Merger G uidelines, a vertical  merger may 
significantly impede effective competition as a result of non-coordinated effects if 
such merger gives rise to foreclosure.  
(221)  The Non -Horizontal Merger G uidelines distinguish between two forms of 
foreclosure. Input foreclosure occurs where the merger is likely to raise the costs of 
                                                 
186  Form CO, paragraph 173.  
187  Q1, replies to question 44.1.  
 
39 downstream competitors by restricting their access to an  important input. Customer 
foreclosure occurs where the merger is likely to foreclose upstream competitors  by 
restricting their access to a sufficient customer base.  
(222)  In assessing the likelihood of an anticompetitive foreclosure scenario, the 
Commission exa mines, first, whether the merged entity would have, post -merger , 
the ability to substantially foreclose access to inputs or customers, second, whether it 
would have the incentive to do so, and third, whether a foreclosure strategy would 
have a significant detrimental effect on competition.188 
(223)  As regards ability to foreclose, under the Non -Horizontal Merger Guidelines, input 
foreclosure may lead to competition problems if the upstream input is important for 
the downstream product.189 For input foreclosure to be a concern, a vertically 
integrated merged entity must have a significant degree of market power in the 
upstream market. It is only in those circumstances that the merged entity can be 
expected to have significant influence on the conditions of competition in the 
upstream market and thus, possibly, on prices and supply conditions in the 
downstream market.190 
(224)  With respect to incentives to foreclose, paragraph 40 of the Non -Horizontal Merger 
Guidelines states that the incentive of the merged entity to foreclose depends on the 
degree to which foreclosure would be profitable. The vertically integrated firm will 
take into account how its supplies of inputs to competitors downstream will affect 
not only the profits of its upstream division, but also of its downstream  division. 
Essentially, the merged entity faces a trade -off between the profit lost in the 
upstream market due to a reduction of input sales to (actual or potential) rivals and 
the profit gain, in the short or longer term, from expanding sales downstream o r, as 
the case may be, being able to raise prices to consumers.191 Additionally, paragraph 
42 of the Non -Horizontal Merger Guidelines indicates that “ [t]he incentive for the 
integrated firm to raise rivals' costs further depends on the extent to which 
downst ream demand is likely to be diverted away from foreclosed rivals and the 
share of that diverted demand that the downstream division of the integrated firm 
can capture ”. 
(225)  As regards the effects of input foreclosure, the Non -Horizontal Merger Guidelines 
expla in that such conduct raises competition concerns when it leads to increased 
prices on the downstream market. First, anticompetitive foreclosure may occur when 
a vertical merger allows the merging parties to increase the costs of downstream 
rivals in the ma rket thereby leading to an upward pressure on their sales prices. 
Second, effective competition may be significantly impeded by raising barriers to 
entry to potential competitors.192 The Non-Horizontal Merger Guidelines further 
state that if there remain suf ficient credible downstream competitors whose costs are 
not likely to be raised, for example because they are themselves vertically integrated 
or they are capable of switching to adequate alternative inputs, competition from 
                                                 
188  Non-Horizontal Merger Guidelines, paragraph 32.  
189 Non-Horizontal Merger Guidelines, paragraph 34.  
190 Non-Horizontal Merger Guidelines, paragraph 35.  
191  Non-Horizontal Merger Guidelines, paragraph 40. 
192  Non-Horizontal Merger Guidelines, paragraphs 47 -49. 
 
40 those firms may constitute a su fficient constraint on the merged entity and therefore 
prevent output prices from rising above pre -merger levels.193 
(226)  For customer foreclosure to be a concern, a vertical merger must involve a company 
which is an important customer with a significant degree o f market power in the 
downstream market. If, on the contrary, there is a sufficiently large customer base, at 
present or in the future, that is likely to turn to independent suppliers, the 
Commission is unlikely to raise competi tion concerns on that ground.194 
5.3.2.  Affected markets  
(227)  The Transaction gives rise to a vertical relationship insofar as Kathrein  supplie s 
antenna modules, which are used as an input by RAN equipment suppliers such as 
Ericsson  to manufacture active antennas. In light of the market sha res set out in 
Sections 5.1.5  and 5.1.6  above , the Transaction  gives rise to a number of  vertically 
affected markets , namely  the upstream market for antenna modules  (and potential 
sub-markets for antenna modules used for semi -active and AAS antennas)  and t he 
downstream market for active antennas  (and potential sub -markets  for semi -active 
and AAS antennas ).195 
5.3.3.  Antenna modules  and active antennas  
5.3.3.1.  Introduction  
Technical characteristics of active antennas  
(228)  The development of an active antenna  requires the mechanical and electrical 
integration of an antenna module and a radio unit  (which is a RAN equipment 
component) in the same physical housing .196  
(229)  The Notifying Party explains that  antenna  modules  are c ustomer -specific products 
based on specification require ments197 defined by the RAN equipment supplier . 
RAN equipment suppliers select antenna modules to be integrated in their active 
antennas  via calls for tenders .198 Once the antenna module manufacturer has been 
selected for a specific project, it closely collabo rates with the RAN equipment 
supplier  in the development of the active antenna.199 The Notifying Party  thus 
                                                 
193  Non-Horizontal Merger Guidelines, paragraph 50.  
194 Non-Horizontal Merger Guidelines, para 61.  
195  In the Form CO, the Notifying Party also provides an analysis on why the relationship between the 
markets for the supply of antenna modules and active antennas does not lead to anticompetitive 
conglomerate effects (see Notifying Party’s Reply to RFI7 of 25 July 2019, question 18). The 
Commission notes that such an analysis does not appear relevant in t he assessment of the Transaction, as 
antenna modules constitute an input for the development of active antennas rather than a complementary 
product which can be purchased also on a standalone basis  by the end customers. Therefore, the 
Commission does not a ddress any potential conglomerate effects arising from the Transaction in this 
regard.  
196  Form CO, paragraph 57.  
197 The RAN equipment supplier conceptually designs the complete active antenna product resulting in a 
specification of the antenna module. This  specification includes the electrical and radiating properties and 
performance as well as mechanical mounting interface. Form CO, paragraph 131.  
198  Form CO, paragraph 119.  
199  The Notifying Party explains that after the award has been concluded, a phase is  entered in which the 
RAN equipment supplier and the selected antenna module manufacturers adjust or finalize the complete 
 
 
41 explains that  the development of active antennas requires RAN capabilities and 
therefore standalone antenna manufacturer s cannot  produce active antenn as.200 
(230)  There are no standard interfaces  for the integration of the radio and the antenna 
module into an active antenna, i.e. , each active antenna has a specifically designed 
antenna module and interface to the radio module. MNOs thus cannot procure the 
integ ral components of an active antenna separately and instead  purchase integrated 
active antennas from RAN equipment suppliers.201 
(231)  The Commission notes  that, as explained in paragraph s (69) and (171) , passive 
antennas are interoperable with the RAN equipment of  any RAN vendor due to 
established standardised physical interfaces . In contrast, the interface between active 
antennas and other RAN equipment components  in a mobile network  is vendor -
specific and proprietary.202 Therefore, MNOs must purchase active antenna s and 
other RAN equipment components from the same RAN equipment supplier.  
(232)  The O-RAN Alliance203, which was founded by several industry players in 2018, 
serves as a forum for discussing an open  interface for RAN solutions .204 Ericsson is 
a member of the O -RAN  Alliance , while Kathrein is not . Open interfaces , if widely 
adopted in the industry, would allow MNOs to procure active antennas and other 
RAN equipment c omponents from different vendors and increase the interoperability 
of all components in the mobile ne twork .205 However, the Commission notes that 
specifications for fully open baseband interfaces are not mature as no products have 
been brought to market at this point in time. Therefore, any future potential impact 
of the O -RAN Alliance on competition in the  active antenna market cannot be taken 
into account  to assess the Transaction ’s effects  and will not be further discussed in 
this decision.  
Ericsson's and Kathrein's activities  
(233)  Ericsson produces semi -active and AAS antennas. In the period 2016 -2018, Erics son 
has sourced antenna modules for its active antenna offerings from [supplier 
information]  and Kathrein. For active antennas under development and not yet 
                                                                                                                                                      
product design together. During this process the purchaser's and the supplier's know -how is combined to 
reach the best possible resul t from the view of all parties involved. See Form CO, paragraph s 131 and  297. 
200  Form CO, paragraph 305.  
201  Form CO, paragraph 280.  
202  The Notifying Party explains that the interface between the baseband and the radio is currently to a very 
large extent an  interface based on the Common Public Radio Interface ("CPRI") standard. This is a 
baseband interface which is only standardised up to a general point, on top of which, each RAN 
equipment manufacturer has  added its specific dialect of the interface to supp ort certain features of its own 
radios and baseband software. See Form CO, paragraph 54.  
203  The O -RAN Alliance was founded in August 2018 by a number of industry players (A T&T, China 
Mobile, Deutsche Telekom, NTT , and Orange ). O-RAN is an initiative aiming to develop an open 
interface for RAN equipment and a wide ecosystem based on ensuring interoperability of RAN equipment 
components (radio and baseband) from different RAN equipment suppliers.  
204  Based on the Notifying Part y’s submission, for active antennas, such an open interface concerns the 
connection between the radio and the baseband interface and not the connection between the antenna 
module and the radio within the active antenna, which in any event is defined by the  RAN equipment 
supplier and will remain vendor specific and proprietary . See Form CO, paragraph 143  
205  Minutes of  call with Telefonica of 11 June 2019, paragraph 6.  
 
42 released , Ericsson also procured antenna modules from [supplier information] . 
[supplier information] .206 
(234)  Currently, Kathrein [business relationship]  for the development and supply of semi -
active antennas . Kathrein 's business relationship with Ericsson regarding semi -active 
antennas  is long -standing, having started in 2012 . It concerns semi -active antennas 
called AIR products. The Target Business  also started delivering antenna modules 
for AAS active antennas [business relationship] .207 
(235)  The Notifying Party explains that Kathrein [tender information] . [tender 
information].208  
(236)  The C ommission examined whether the Transaction could give rise to a possible risk 
of input foreclosure for the supply of antenna modules , as a result of  exclusive  
supplies of Kathrein’s antenna modules  to Ericsson , to the detriment of other RAN 
equipment suppl iers. In addition, the Commission assessed the risk of a possible 
customer foreclosure for Kathrein’s competitors should  the merged entity stop 
acquiring antenna modules  from other antenna manufacturers and exclusively rely 
on the antenna modules  provided by Kathrein . 
5.3.3.2.  Notifying Party’s view  
(237)  According to the Notifying Party, the Transaction is not likely to lead to input or 
customer foreclosure with regard to active antennas for the reasons  set out at 
paragraphs (238)-(243) below .  
(238)  First, with regard to possible input foreclosure , the Notifying Party submits that 
Kathrein does not have any market power in the possible segment for antenna 
modules. Kathrein’s market share is higher only in a potential segment for antenna 
modules for semi -active antennas,  around [30-40]% at worldwide level  (and [5-10]% 
in the EEA) . However, regarding  antenna modules for AAS, which will gain in 
importance in the future, Kathrein’s market share is around [0-5]% at the worldwide 
level, and Kathrein currently does not have any activities in the EEA. The Notifying 
Party explains that semi -active antennas are considered as a  “bridge technology”209 
which is rapidly declining.210 In addition, antenna modules are produced and 
                                                 
206  [tender information]. See Notifying Party’s Reply to RFI 7 of 25 July 2019, question 7.  
207  Form CO, paragraph 62.  
208  The Notifying Party submits that [tender information]. See Notifying Party’s Reply to RFI 7, question 3.  
209  The Notifying Party explains that s emi-active antennas allow for a faster deployment  than passive 
antennas  and therewit h performance improvements for MNOs . As the passive and active components are 
already adjusted to each other, the installation process on site is faster. Regarding performance, the benefit 
is that the high level of integration of passive and active compone nts in the same physical unit allows for 
shorter signal paths compared to passive antennas on masts with a long cable connecting them to the base 
station . According to the Notifying Party, AAS encompass the same advantages mentioned above (i.e. 
faster depl oyment and better performance in comparison to passive antennas)  and in addition are a further 
development of the semi -active antenna . The Notifying Party expects that replacement of semi -active 
antennas by AAS will increase in the future.  See Notifying P arty’s Reply to RFI 7, questions 11 and 12.  
210  The share of semi -active antennas in the total size of the antenna market at the worldwide level (based on 
sales) is expected to decline in the coming years (from around […] in 2019 to […] in 2022). AAS are 
expected to account for […] of the total antenna market in 2022 as compared to […] in 2019. See Form 
CO, paragraph 79.  
 
43 supplied via bidding procedures which ensure fier ce competition between antenna 
module suppliers.211 
(239)  Second, in the Notifying Party’s view, RAN equipment suppliers are not dependent 
on Kathrein's antenna modules for their active antenna offerings. C urrently Kathrein 
does not deliver antenna modules for active antennas to any customer other than 
Ericsson. The Notifying Party argues that, a s antenna modules are (i) based on 
specification requirement  determined by RAN equipment manufacturers and (ii) 
sourced on the basis of b idding procedures, other antenna suppliers will be able to 
produce such products for Ericsson’s competitors. Post-Transaction, there will be 
various suppliers from which Ericsson's competitors can source antenna modules, 
e.g., Huawei, Commscope, Comba, Ton gyu, Mobi, RFS, Rosenberger and 
Amphenol as well as numerous smaller and regional active and spec ialised antenna 
suppliers.  
(240)  Third, the Notifying Party submits that t he merged entity will not have the  incentive 
to foreclose access to antenna modules. In th e Notifying Party's view, antenna 
modules and active antennas represent a minimal value of the total costs for RAN 
equipment. For antenna modules, RAN equipment manufacturers send RFQs to 
numerous suppliers and will be able to continue to rely on many alternative suppliers  
after the Transaction . According to the Notifying P arty, this is all the more true as no 
other RAN equipment manufacturer is currently procuring antenna modules from  the 
Target Business .212 
(241)  Fourth , with regard to possible customer foreclosu re, the Notifying Party argues that 
Ericsson's market position as a customer of antenna modules is modest . In the 
Notifying Party's view, s uppliers of antenna modules will have a sufficiently large 
customer base available  after the Transaction . It can be e xpected that antenna 
manufacturers’ sales of antenna modules with various RAN equipment 
manufacturers will further  increase as demand for active antennas and antenna 
modules, respectively , will increase in the coming years  with the roll -out of 5G 
networks .213 
(242)  Fifth, the Notifying party submits that  Ericsson will not have an incentive to stop 
sourcing antenna modules fr om third parties (such as [supplier information] ). The 
Notifying Party submits that Ericsson will continue to source antenna modules from 
[supp lier information] .214 [business strategy] .  
(243)  Finally , according to the Notifying Party, as Ericsson’s competitors do not currently 
source antenna modules from Kathrein, the Transaction will not have any effect on 
the possible market for active antenna s. Furth ermore, the Notifying Party argues that 
the main RAN equipment manufacturers will be able to replicate the merged entity’s 
active antenna offering post -Transaction by relying at least partly on in -house 
                                                 
211  Notifying Party's Reply to RFI 7 of 25 July 2019, question 18.  
212  Notifying Party's Reply to RFI 7 of 25 July 2019, question 18.  
213  Notifying Party's Reply to RFI 7 of 25 July 2019, question 18.  
214  Form CO, paragraph 166.  
 
44 antenna modules capabilities (Huawei, Nokia) or on th ird party antenna module 
suppliers (Samsung, ZTE).215  
5.3.3.3.  Commission’s assessment  
(244)  The Commission considers that  the merged entity will not have the ability and 
incentive  to foreclose non-integrated competitors by engaging in input or customer 
foreclosure . Furth ermore, e ven if the merged entity would engage in input or 
customer foreclosure ( quod non ), such strategy would not have a significant 
detrimental effect on competition . 
(A) Input foreclosure  
As regards ability  
(245)  First, the merged entity will not have a significant degree of market power  in the 
upstream market for the supply of antenna modules. As set out in Table 10, in 2018, 
Kathrein’s market share in the potential market for the supply  of antenna modules is 
limited  (especially at EEA level) and has bee n [market position]  compared to 2017 . 
Kathrein’s market share is currently higher than 30% only in the potential market for 
antenna modules used in semi -active antennas at the worldwide level  ([30-40]%) but 
is not as such indicative  of market power , in par ticular taking into account the factors 
considered below .216  
(246)  Second , RAN equipment suppliers are not dependent  on Kathrein's antenna modules 
for developing  active antennas.  
(247)  The results of the market investigation confirm that Kathrein’s antenna modules are , 
on balance,  comparable to those of other suppliers in terms of quality  and 
performance.217 Some respondents point out  that the price of Kathrein’s antenna 
modules is higher than other suppliers , making it difficult for Kathrein to be 
compet itive.  
(248)  [busines s relation] . Based on the Notifying Party’s submission, Kathrein [tender 
information] .218  
(249)  Furthermore, with regard to antenna modules for AAS antennas, over the period 
2016 -2018, Kathrein [tender information] .219,220 Ericsson 's internal documents  
indicate that  [supplier information] .221  
(250)  Third, the Commission notes that the merged e ntity would not have  the ability to  
foreclose rival RAN equipment suppliers through  input foreclosure by degrading the 
                                                 
215  The Notifying Party refers to an example of a successful partnership between Nokia and CommScope for 
the development of active antennas. See Form CO, paragraph 188 . 
216  As explained in paragraph  (161), Kathrein does also not have significant market power with regard to 
passive antennas. Therefore,  Kathrein would equally not have significant market power in a potential 
broader market encompassing passive antennas and antenna modules.  
217  Q3, replies to questions 41 and 41.1; Q1, replies to question 46; Q2, replies to question 46.  
218  Notifying Party’s Reply to RFI 7, question 6.  
219  Notifying Party’s Reply to RFI 7, question 3.  
220  [business relationship]. [market informat ion on a third party supplier]. See Q2, replies to question 27.1.  
221  Notifying Party’s Reply to RFI 9, question 5, Annex 1 and Annex 2.  
 
45 terms and conditions  by which it will supply antenna modules to RA N equipment 
suppliers . 
(251)  The market investigation results indicate that RA N equipment suppliers are not 
dependant on Kathrein’s antenna modules for their active antennas  and that there 
will remain a sufficient number of alternative suppliers of antenna modul es after the 
Transaction.222 For example, an antenna module  manufacturer expressed the view 
that “there is and will continue to be competition between antenna module providers 
and that the real negotiating power will lie with the RAN vendors that are active 
antenna suppliers”  such that the merged entity will not have the ability to degrade 
terms and conditions for the supply of antenna modules . 223 
(252)  [business relationship] . Therefore , the Transaction is unlikely to affect  any possible 
ability of the merged entity to foreclose competitors by degrad ing terms and 
conditions by which it will supply antenna modules to them.  As a result, the 
Transaction is unlikely to  bring about material merger -specific change s in the 
upstream market for the supply  of antenna modules  that would affect downstream 
competitors .  
(253)  Fourth , non -integrated competitors have effective and timely counter -strategies  
available in order to be able to effectively compete with the merged entity  in the 
event of an input foreclosure strategy  by the merged entity .  
(254)  Antenna modules  are customer -specific products, which are developed on the basis 
of specifications defined by RAN equipment suppliers. Furthermore, a ntenna 
modules are manufactured and supplied on the ba sis of calls for tenders and 
collaboration between antenna module manufacturers and active antenna suppliers.  
(255)  There will remain a sufficient number of credible alternative antenna module 
suppliers  after the Transaction to allow non -integrated RAN equipmen t suppliers to 
manufacture and supply active antennas, as confirmed by the market investigation 
results.224 Such antenna manufacturers include, e.g. Commscope, Comba, To ngyu, 
Mobi, RFS, Rosenberger,  Amphenol  and other smaller antenna manufacturers . The 
vast majority of r espondents to the market investigation confirmed that  post-
Transaction there will be “ enough competition”  and that globally there are “many 
alternative vendors” .225  
(256)  The results of the market investigation  thus show that  market players which are not 
vertically integrated will have the ability to effectively compete with the merged 
entity post -Transaction.226 Respondents to the market investigation point out that 
various active antennas are already produced through partnersh ips between vendors 
of RAN equipment and antenna module  manufacturers.227 Standalone antenna 
module  manufacturers and RAN equipment suppliers will thus have the ability to  
replicate the merged entity’s active antenna offering by entering into partnerships.  
                                                 
222 Q1, replies to question 55;  Q3, replies to question 44.1 . 
223  Q1, reply of Commscope to question 51.1.  
224  Q1, replies to question 55; Q2, replies to question 55; Q3, replies to question 47.  
225  Q1, replies to questions 51.1 ; Q2, replies to question 55.1.  
226  Q1, replies to question 57; Q2, replies to question 57; Q3, replies to question 48.  
227  Q3, replies to question 48.  
 
46 As regards i ncentive s 
(257)  The Commission  considers that , on balance,  the merged entity is unlikely to have an 
incentive to engage in an input foreclosure strategy .  
(258)  The value of antenna modules is significantly lower than the value of active 
antennas .228 As the Notifying Party explains, the value of antenna modules in semi -
active antennas is around [30-40]%  of its total value, and [0-5]% in AAS active 
antennas.229 Furthermore , a number  of antenna manufacturers  that respond ed to the 
market investigation cons ider that the merged entity may have the incentive to stop 
supplying antenna modules to competing active antenna manufacturers.230 
(259)  [business relationship] . Therefore, there are no indications that, by engaging in an 
input foreclosure strategy, the merged ent ity would  divert any demand away from 
rivals in the downstream  market for active antenna s, although  it would likely forego 
any potential sales of antenna modules to third parties . This factor therefore limit s 
any possible incentive the merged e ntity might have to engage in foreclosure in 
relation antenna modules .  
(260)  Similarly, the merged entity is unlikely to have an incentive to engage in input 
foreclosure by degrading the terms and conditions for the supply of antenna 
modules. [market position] . By degradin g terms and conditions for the supply of 
antenna modules, the merged entity would risk  further  losing potential sales of 
antenna modules without any conceivable gain in the downstream market for active 
antennas.  
(261)  [reference to internal documents on post -Transaction business strategy ].231 
(262)  It follows that, on balance, the merged entity is unlikely to have the incentive to seek 
to foreclose rivals by engaging in an input foreclosure strategy.  
As regards effect s  
(263)  Even if the merged entity pursue d an input foreclosure strategy, for the reasons set 
out in paragraphs (245) -(262) , such a strategy  is unlikely to  result in a reduction in 
rivals ’ ability or incentive to compete with the merged entity  and lead to increased 
prices in the downstream market for active antennas . 
(264)  First, Kathrein's role in the potential market for antenna modules is limited. [business 
relation] . [market position] .232  
(265)  Second , for the reasons set out in  paragraphs  (253)-(256) above, post -Transaction, 
there will remain a sufficient number of credible alternative antenna module  
suppliers such that non -integrated players will be able  to enter into partnerships and 
replicate the merged entity’s active antenna offering.  Therefore, post -Transaction 
                                                 
228  Q2, replies to question 50.2.  
229  Form CO, paragraph 78.  
230  Q1, replies to questions 49 and 49.1; Q2, replies to question s 50 and 50.1.  
231  [internal documents].  
232  Notifying Party’s Reply to RFI 7 of 25 July 2019, question 3.  
 
47 RAN equipment suppliers will be able to continue to effectively compete with the 
merged entity in the downstream market for active antennas . 
Conclusion  
(266)  In light of the above considerations and  based on the results of the market 
investigation, the Commission considers the Transaction does not give rise to serious 
doubts as to its compatibility with the internal market as a result of an y input 
foreclosure strategy by the merged entity with regard to antenna modules . 
(B) Customer foreclosure  
As regards ability   
(267)  First, the merged entity will not have a significant degree of market power  in the 
downstream market for the manufacturing and supply of active antennas . As set out 
at paragraph (1 32), irrespective of the precise market definition,  Ericsson’s market 
share in the potential market for active ante nnas [market position]  from its market 
share in the market for RAN equipment, where Ericsson does not have a significant 
degree of market power (see paragraph s (157)-(160) above).  
(268)  In addition, t he market investigation confirms that Ericsson’s active antenn a 
portfolio is comparable to those of other active antenna suppliers in terms of quality, 
performance, price and other characteristics.233 Moreover, the results of the market 
investigation strongly suggest that the market for active antennas , in particular AAS , 
is nascent and in the early stages of its development.234  
(269)  Second, the Commission considers that  Ericsson does not constitute an important 
route to market  for antenna module manufacturers. None of the antenna suppliers 
that responded to the market inves tigation sold any antenna modules to Ericsson in 
the past 3 years (Ericsson only purchased antenna modules from Kath rein and 
[supplier information] , see paragraph (2 33)).  
(270)  A majority of antenna manufacturers indicated that they supply antenna modules and 
cooperate with other RAN equipment suppliers for the development of active 
antennas.235 RAN equipment suppliers that responded to the market investigation 
confirm  that they source antenna modules and cooperate with several antenna 
manufacturers for the develo pment of active antennas.236  
(271)  Third, the merged entity  is unlikely to  have the ability  to exclusively rely on in -
house production  to source its internal requirements of antenna modules, to the 
exclusion of other antenna module suppliers.  
(272)  Several respondents  to the market investigation confirm that active antenna designs 
and requirements vary widely among vendors and different vendors have unique 
selling points such as cost, performance, compactness, modularity, beam steering 
                                                 
233  Q1, replies to question 47; Q2, replies to questions 47 and 47.1; Q3, r eplies to questions 42 and 42.1.   
234  Q2, replies to question 47.2.  
235  Q1, replies to questions 29 and 29.1.  
236  Q2, replies to question 27.1  
 
48 capability etc.237 On that basis, t he merged entity will be unlikely to be able  to meet 
all requirements by solely relying on its in -house antenna module capacity.238  
(273)  Furthermore, Ericsson plans to purchase antenna modules from a number of third 
party suppliers such as [supplier information] .239 The Commission notes that , 
[business strategy ], Ericsson will most likely need to continue sourcing different 
antenna modules from several suppliers. The Commission thus considers that the 
merged entity will most likely not have the ability to stop sour cing antenna modules 
from alternative antenna manufacturers post -Transaction.  
(274)  Fourth, the Commission notes that non -integrated competitors have effective and 
timely counter -strategies  available in order to compete with the merged entity  in the 
event of a c ustomer foreclosure strategy .  
(275)  The majority of antenna manufacturers and RAN equipment suppliers that responded 
to the market investigation indicate that Ericsson’s competitors in the downstream 
market for active antennas that will continue to procure ante nna modules for their 
active antenna offerings include Nokia, Samsung, ZTE, and new entrants such as 
Mavenir and Altiostar.240 Therefore, there will remain sufficient demand for antenna 
modules from alternative RAN equipment suppliers  after the Transaction .  
As regards i ncentive s  
(276)  The Commission considers that , on balance,  the merged entity is unlikely to have an 
incentive to engage in a customer foreclosure strategy .  
(277)  First, it would  not appear profitable for the merged entity to exclusively rely on 
Kathrein 's antenna modules due to potentially higher costs associated with reduced 
purchases from alternative antenna module suppliers . The quality of Kathrein’ s 
antenna modules is on par with that of other suppliers, but its prices are higher, as 
confirmed by the  market  investigation (see paragraph (247) ). [reference to internal 
documents on post -Transaction business strategy] .241  Some respondents to the 
market investigation also point out that given the high price of Kathrein’s antenna 
modules, the merged entity w ill most likely deploy alternative solutions such as sub -
contracting to third party antenna module manufacturers. 242  
(278)  Second , due to product differentiation, Ericsson is likely to continue sourcing 
antenna modules from third parties in order to develop and expand its active antenna 
portfolio.  Antenna modules are customer -specific products, whereby the 
development of each antenna module requires a team of developers for a period of 9 -
12 months.243 As the market for AAS antenna s is projected to grow, [business 
strategy] .244 [business strategy] . 
                                                 
237  Q1, replies to questions 48 and 48.1; Q2, replies to questions 48 and 48.1.  
238  Q2, replies to question 48.1  and 49.1 . 
239  Notifying Party’s Reply to RFI 7 of 25 July 2019, Annex 2.  
240 Q1, replies to questions 56 and 56 .1; Q2, replies to question 56.  
241  [internal documents]  
242  Q1, replies to question 49.1; Q2, replies to qu estion 49.1.  
243  Form CO, paragraph 307.  
244  [internal documents].  
 
49 As regards effects  
(279)  The Commission considers that even if the merged entity attempt ed to engage in a 
customer foreclosure strategy, the Transaction would not adversely affect upstream 
rivals’ ability to compete in such a way as to lead to  detrimental effects on 
competition in the downstream market for the supply of active antennas .245  
(280)  The Commission notes that , as explained in paragraph (132)  above,  Ericsson’s 
position in the downstream market for active antenna s is relatively limited . Before 
the Transaction, Ericsson sources antenna modules primari ly from Kathrein and 
[supplier information] and accounted for less than 10% of antenna module suppliers’ 
sales  (other than Kathrein)  in the last 3 years . 
(281)  Moreover, for the reasons set  out in  paragraph s (133) and (275), post-Transaction 
antenna module suppliers will be able to sell their product to a number of alternative 
active antenna ma nufacturers such as  Nokia, Samsung, ZTE, Mavenir  and Altiostar . 
Therefore, the Commission considers  that any potential customer foreclosure 
strategy of the merged entity will not deprive  antenna module suppliers in  the 
upstream market of access to a suffic ient customer base  in the downstream market  
for active antennas  and will thus not reduce their abil ity to compete in the 
foreseeable future . As a result, the Transaction would also not lead to detrimental 
effects in the downstream market for active antennas.  
Conclusion  
(282)  In light of the above considerations and the results of the market investigation, th e 
Commission considers that the Transaction does not raise serious doubts as to its 
compatibility with the internal market in relation to a  possible customer foreclosure 
strategy by the merged entity with regard to active antennas .  
6. CONCLUSION  
(283)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regul ation and Article 57 of the EEA Agreement .  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission  
 
                                                 
245  Non-Horizontal Merger Guidelines, paragraph 72.