The European Commission (EC) is expected to clear Telefonica’s planned €8.6bn (US$11.7bn) takeover of KPN’s German mobile operator E-Plus provided local MVNOs can lease at least a fifth of the combined companies’ network capacity.
The commission…
The European Commission (EC) is expected to clear Telefonica’s planned €8.6bn (US$11.7bn) takeover of KPN’s German mobile operator E-Plus provided local MVNOs can lease at least a fifth of the combined companies’ network capacity.
The commission is set to brief national competition regulators tomorrow.
“The European Commission will clear the deal,” Reuters cited a person with knowledge of the matter as saying. Concessions could help to boost the competitiveness of up to three MVNOs, according to two people familiar with the matter.
Telefonica is said to be working to seal deals with Germany’s Freenet, United Internet and Drillisch in connection with concessions.
Spokespeople for the commission and Telefonica have declined to comment.
The deadline for the EC’s phase II investigation is 10 July, but a decision could come sooner.
Clearance would likely upset German antitrust regulator, the FCO, which has argued that offered remedies for the deal, which would reduce the number of players in the local mobile market from four to three, are insufficient.
FCO head Andreas Mundt sent a letter to European Competition Commissioner Joaquin Almunia last month contending that the remedies do not resolve competition concerns and could lead to price hikes. An EC spokesperson yesterday confirmed the authority is in contact with the FCO but declined to comment further.
According to the Reuters report, concessions are likely to be generally similar to those offered by Hutchison Whampoa for its takeover of O2 Ireland, cleared by the EC last month. Hutchison has agreed to pave the way for two new Irish MVNOs and continue its network-sharing deal with incumbent Eircom.
