Industry concerns grow following HPE's acquisition of Juniper

This article was published in Capacity Magazine on August 9 2024. You can read the original article here.  

In response to the recent approval by the UK’s Competition and Markets Authority (CMA) of Hewlett Packard Enterprise’s (HPE) acquisition of Juniper Networks, Hannes Gredler, CTO of RtBrick, has voiced significant concerns over the implications of such large-scale mergers in the telecom industry.

The US$14 billion deal is one step closer to completion following UK clearance by the CMA and comes two months after the initial announcement of the probe. 

“These big acquisitions are becoming the norm, especially in the telecom industry, and it’s quite alarming for customers,” Gredler said.

“The market is clearly shifting towards bigger players consolidating power, which is why the CMA has tried to scrutinise the deal. The bottom line is that while HPE has strengthened its market position by acquiring Juniper, it has also left a concerning dent in competition, customer choice, and confidence.”

Gredler’s remarks highlight a growing unease among industry leaders about the trend of consolidation, where major players are absorbing smaller or rival companies to bolster their market dominance.

He pointed to the recent $2.3 billion acquisition of Infinera by Nokia as another example of this trend.

According to Gredler, Nokia’s move to dominate the optical network market by acquiring Infinera, while enhancing its competitive edge, also diminishes the number of independent vendors in the space, further limiting customer choice.

“Acquisitions of this nature inevitably come with product overlap and resetting priorities by the acquiring company, leaving customers uncertain about the future of their chosen products,” Gredler warned, underscoring the potential disruption such deals can cause to existing customer bases and the broader market.

While Gredler expressed cautious optimism about the CMA’s decision to approve the HPE-Juniper deal, he emphasised the need for ongoing vigilance.

“We welcome CMA’s decision today, but we need to carefully inspect the impact of such deals on the wider market and ensure the right to fair competition and innovation. We’ll be watching this one closely.”