Telefonica Germany opens network up to competition

In a bid to stave off antitrust concerns over its acquisition of E-Plus, Telefonica’s German operation on Wednesday announced plans to open its network up to a local MVNO and IT services firm.

Telefónica Deutschland has signed an agreement with Drillisch, according to which Drillisch has agreed to acquire 20per cent of the capacity of all mobile networks that will be under the control of Telefónica following the proposed acquisition of E-Plus.

In addition, Drillisch will have the right to acquire up to ten per cent additional capacity of the network in the future. Telefónica Deutschland will grant Drillisch access to the future joint network of Telefónica and E-Plus via a Mobile Bitstream Access model.

Telefonica acknowledged that the deal has been put in place “in order to remove competition concerns of the European Commission” and will become effective only if the European Commission conditionally clears the acquisition of E-Plus. A decision on the merger is expected in July.

In October last year KPN’s shareholders approved the sale of E-Plus to Telefónica Deutschland for a bid of €5bn in cash and a 20.5 per cent stake in Telefónica Deutschland post transaction. KPN said the deal will allow it to refocus on its operations in the Netherlands and Belgium.

However, the deal is still subject to regulatory approval and after consulting industry stakeholders, the regulator has voiced concerns regarding the total amount of spectrum the firms would possess. It’s likely that some spectrum would be forfeit as part of the merger approval.

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