The European Commission (EC) has reportedly sent out a questionnaire to telecoms companies, which suggests it is considering requiring Telefonica Deutschland (O2) and E-Plus to sacrifice spectrum to secure regulatory approval for their planned…
The European Commission (EC) has reportedly sent out a questionnaire to telecoms companies, which suggests it is considering requiring Telefonica Deutschland (O2) and E-Plus to sacrifice spectrum to secure regulatory approval for their planned merger.
The seven-page confidential questionnaire includes questions about competition and pricing in Germany’s retail and wholesale mobile markets, the Wall Street Journal reported, referring to the document.
The questionnaire also suggests the EC, carrying out an in-depth, phase-two investigation of the planned €8.55bn (US$11.7bn) deal, is looking at network sharing agreements, 4G frequency allocation and barriers to entering the German mobile market.
The deal would create a mobile operator similar in size to Germany’s two largest players – incumbent Deutsche Telekom and Vodafone – and reduce the number of competitors from four to three.
In December, the EC expressed concern that “the transaction would remove an important competitive force and change the merged entity’s incentive to exert significant competitive pressure on the remaining competitors”.
The questionnaire reportedly reflects the Commission’s previously-stated concerns and does not focus on any specific area. Recipients are expected to reply by the end of the week, the report cited one source as saying.
With respect to frequency allocation, the questionnaire reportedly asks whether it would be possible to roll out a 4G network on either the 800 MHz or 1800 MHz band.
The EC review is being looked on by many as a key test of its stance on consolidation within the EU telecoms sector. Operators have frequently criticised the regulator for being too strict on M&A, impeding their opportunities for expansion.
Earlier this month, the German antitrust authority made a renewed request to the EC for permission to review the deal.
The Commission has until 12 February to take a decision on the reminder referral request, while its provisional deadline for its own phase-two investigation is 14 May.
