The German telecoms regulator is preparing a review of the spectrum aspects of Telefonica’s proposed €8.1bn takeover of KPN’s local mobile unit E-Plus, warning that frequencies could be confiscated under certain circumstances.
Federal Network…
The German telecoms regulator is preparing a review of the spectrum aspects of Telefonica’s proposed €8.1bn takeover of KPN’s local mobile unit E-Plus, warning that frequencies could be confiscated under certain circumstances.
Federal Network Agency vice president Iris Henseler-Unger sent letters to the heads of Telefonica Deutschland (O2) and E-Plus telling them that the GSM and UMTS-based frequencies were assigned on the condition that licence holders remain independent.
The letter to E-Plus, dated 25 July, stated that, as a rule, the agency must preserve the competitive independence of frequency licence holders. Hensler-Unger noted that the agency can enforce this by withdrawing frequencies.
In the letter, seen by TelecomFinance, the regulator asked the companies to provide information within a fortnight and said it plans to seek feedback from rivals. The authority will then determine whether frequencies will be “efficiently used” post-takeover and whether the combination will reduce competition.
An E-Plus spokesperson confirmed the company has received a letter from the Federal Network Agency but declined to comment on its contents as the approvals processes are still at an early stage. He noted that the companies gave relevant stakeholders, such as the telecoms and competition regulators, a “heads up” when the deal was announced – a first step in talks they expect to keep up over the coming months.
Spanish telco Telefonica announced in late July that it had agreed to buy E-Plus from its Dutch parent. At the time, the parties said they expected the deal, which is also subject to shareholder approvals, to close in mid-2014.
However, it appears KPN has not yet secured the approval of its largest shareholder, Carlos Slim’s America Movil (AMX). Last week, AMX ended its relationship agreement with KPN, entitling it to launch a full takeover bid and potentially block the deal. The move followed speculation that the Mexico-based telecoms giant might end the agreement if it decided not to support the takeover.
O2 was not immediately available for comment.
