Germany’s antitrust regulator has expressed concerns about Telefonica’s planned €8.6bn takeover of E-Plus to the European Commission (EC), arguing that submitted remedies are insufficient.
Andreas Mundt, head of the Federal Cartel Office (FCO),…
Germany’s antitrust regulator has expressed concerns about Telefonica’s planned €8.6bn takeover of E-Plus to the European Commission (EC), arguing that submitted remedies are insufficient.
Andreas Mundt, head of the Federal Cartel Office (FCO), sent a letter to European Competition Commissioner Joaquin Almunia last month contending that Telefonica’s remedies would not maintain competition in the German mobile market, a spokesperson for the regulator confirmed.
The EC is reportedly close to clearing the merger after the Spanish telco put forward improved remedies, including releasing up to 30% of O2 Deutschland and E-Plus’ combined spectrum to MVNOs.
Mundt’s letter stated the deal, which would reduce the number of local mobile network operators from four to three, could lead to price rises, pointing to the situation in Austria, the Wall Street Journal cited a person familiar with the matter as saying.
The EC approved Hutchison Whampoa’s takeover of Orange Austria, also a four-to-three deal, with significant remedies last year after a drawn-out review and prices in the local market are said to have increased since.
The FCO is also concerned that allowing a new entrant to use Telefonica’s network on a wholesale basis would not resolve competition issues, the FT cited a person familiar with the regulator’s position as saying.
The deadline for the EC’s phase II investigation is 10 July, but a decision could come sooner.
Last month, the commission approved Hutchison Whampoa’s €850m takeover of Telefonica’s O2 Ireland 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 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.
A spokesperson for the EC’s competition division confirmed it is in contact with the FCO and that national competition authorities will be consulted before a final decision is taken, but declined to comment further.
