The vast majority of national competition regulators reportedly did not vote in favour of the European Commission’s (EC’s) suggested remedies for Telefonica’s €8.6bn takeover of Germany’s E-Plus.
Just two of 12 national regulators – from…
The vast majority of national competition regulators reportedly did not vote in favour of the European Commission’s (EC’s) suggested remedies for Telefonica’s €8.6bn takeover of Germany’s E-Plus.
Just two of 12 national regulators – from Belgium and Sweden – voted for the remedies, which require Telefonica to lease network capacity to MVNOs, the Financial Times reported citing two officials involved in the recent meeting.
Five countries voted against –Germany, Austria, Ireland, Italy and the UK – and five abstained: Denmark, France, the Netherlands, Portugal and Spain.
All 12 advisory committee regulators present at the meeting agreed the deal would hamper competition and lead to price hikes without remedies.
Last week, it emerged that the EC was expected to clear the deal, which reduces Germany’s number of mobile network operators from four to three, provided local MVNOs can lease at least a fifth of Telefonica Deutschland and E-Plus’ combined spectrum. Gaining the advisory committee’s approval is usually a formality at this stage of EC merger proceedings, although the vote is not binding.
The national regulators’ view of the planned remedies may prompt the EC to re-evaluate them, although typically an absolute majority must vote against a proposal for their stance to be formerly considered.
The German antitrust authority, the FCO, has argued that planned remedies are insufficient, with head Andreas Mundt sending a letter to the EC contending that they do not resolve competition concerns and could give rise to price increases.
Remedies for the E-Plus deal are said to be similar to those offered by Hong Kong-based Hutchison for its takeover of O2 Ireland, cleared by the EC last month. Approval of the four-to-three deal, which requires Hutchison to pave the way for two new Irish MVNOs and continue its network-sharing deal with incumbent Eircom, prompted criticism from the Irish telecoms regulator.
Similarly, the Austrian competition watchdog critiqued the commission’s clearance of Hutchison’s takeover of Orange Austria in late 2012, another four-to-three deal, which has been followed by price rises.
Conversely, major European telcos have called for the relaxation of merger rules to enable them to better compete internationally. Politicians have also weighed in on the debate, with German chancellor Angela Merkel and French politicians, also supporting telecoms consolidation.
