An empty Sunrise store.
–
After Sunrise’s plans to buy UPC, the reverse is likely to materialize for 6.8 billion francs. This shows that the two boards of directors and all the shareholders eventually find financial logic in this merger. Consumers risk being the big losers… Lighting.
Indeed, if the transaction were to materialize, the new player UPC-Sunrise will certainly have more weight against Swisscom, but the consumer will probably lose interesting alternatives … The priority of this new group will be synergies and economies of scale. and profitability. A new duopoly will probably be gradually put in place …
Two cultures …
And this is where things will quickly get complicated. Even if there are obvious and interesting synergies between UPC’s cable network and Sunrise’s mobile network, the corporate cultures of these two companies are very different (the sluggishness of the cable vs the dynamism of the mobile), which may complicate the operation. Especially if it is the cable that takes hold of the mobile; the reverse would have been preferable …
A major project will open to carry out this immense challenge, to track down duplicates and optimize the two structures as much as possible. This will also inevitably have an effect on the offer to consumers. We tell ourselves that UPC, which now uses the Swisscom mobile network, will give it up… And that Sunrise, dependent on Swisscom, will use the UPC cable… These migrations will have a price and will take time…
Complex reports …
And then, this new dynamic will cause situations that are funny to say the least. For example, UPC has just reached an agreement with Swisscom on sports rights. From Swisscom to UPC, via Sunrise and the partner cable operators, we will therefore have the same offer… How will Salt position itself?
A Salt, which comes from elsewhere communicate with Sunrise on an optical fiber alliance! Obviously, things will become more complicated for the company in the hands of Frenchman Xavier Niel and its some 1.8 million connections, which will be far behind the nearly six million Sunrise-UPCs and more than 11 million Swisscoms … (Our infographic).
Consolidation in sight
And we are not talking about even smaller companies that will be forced to evolve in the wake of these giants. What will become of the small cable operators already grouped under the banner of Net + in French-speaking Switzerland or Quickline in German-speaking Switzerland? What will become of the smaller networks, some of which already use Sunrise antennas?
The concentration of the sector should at least continue in Switzerland in this logic and perhaps even extend internationally. In this context, we can say that Salt might have every interest in striking hard and fast to play the troublemaker card even more. As far as the Swiss context allows …
Xavier Studer
Liberty Global press release, owner of UPC
