The European Commission (EC) is close to clearing Telefonica’s planned €8.6bn (US$11.7bn) takeover of German mobile operator E-Plus from Dutch telco KPN, the Wall Street Journal reports.
Competition Commissioner Joaquin Almunia is satisfied with…
The European Commission (EC) is close to clearing Telefonica’s planned €8.6bn (US$11.7bn) takeover of German mobile operator E-Plus from Dutch telco KPN, the Wall Street Journal reports.
Competition Commissioner Joaquin Almunia is satisfied with Telefonica’s amended remedies, the paper said, citing three people familiar with the matter.
The remedies are said to include releasing up to 30% of O2 Deutschland and E-Plus’ combined spectrum to local MVNOs. At least one MVNO must sign up to such an agreement for the EC to approve the deal, two of the people were cited as saying. At least four companies have shown interest in doing so, one said.
The EC has declined to comment.
The commission has extended its deadline for its phase II investigation of the deal, which would reduce the number of players in the German mobile market from four to three, to 10 July, but a decision could come sooner. Once Almunia okays a deal, 27 other commissioners need to do so as well, however this is usually a formality.
Earlier this week, it was reported that Telefonica has asked several MVNOs, including Freenet, Drillisch and Liberty Global’s Unitymedia KabelBW, whether they would be interested in accessing its network and boosting certain hardware. Talks with United Internet are said to have collapsed.
Telefonica submitted improved remedies for the deal in early April which were said to have included helping to establish a fourth mobile operator to replace E-Plus. However, due to a lack of interest, the focus of the EC investigation shifted toward improving the competitiveness of MVNOs.
Germany has a well-established MVNO market and O2 Deutschland CEO Markus Haas has argued that there is no indication the merger would make it less robust.
The commission approved Hong Kong-based Hutchison Whampoa’s takeover of 02 Ireland last week on the condition that it paves the way for two new Irish MVNOs and continues its network-sharing deal with incumbent Eircom. The clearance of the €850m (US$1.16bn) deal, which combines Ireland’s second and fourth largest mobile players, has been seen as a positive for four-to-three telecoms consolidation in Europe. However, the E-Plus deal, if approved, is considered to be the most likely to trigger similar consolidation deals across the continent.
