Telefonica gets green light for E-Plus buy

European carrier Telefónica has cleared the final regulatory hurdle ahead of its acquisition of E-Plus from Dutch operator group KPN. The European Commission has confirmed that the previously announced agreement with Drillisch complies with the agreed upfront conditions.

The deal will result in the merger of Germany’s third and fourth-largest operators and reduce the total number of operators in the country to three.

According to Ovum WCIS data, E-Plus currently accounts for around 20.9 per cent of German mobile phone subscribers and O2 Germany, which is owned by Telefónica, has 17.6 per cent of the market as of June 2014. The combined operation would be Germany’s largest with a 38.5 per cent market share, leading T-Mobile with 35.8 per cent and Vodafone with 25.8 per cent.

The EC insisted Telefónica make a number of concessions before it gives the green light. It must sell up to 30 per cent of the merged company’s network capacity to up to three MVNOs, to ensure everything stays nice and competitive. It must also give up an unspecified amount of spectrum to some new competitor and it has promised to play nice with its wholesale agreements.

So in the course of the merger clearance process, Telefónica Deutschland has agreed to sell upfront 20 per cent of its mobile network capacity using a Mobile Bitstream Access model, with the opportunity to extend up to an additional 10 per cent. Telefónica Deutschland had signed a corresponding contract with Drillisch, which the European Commission has now confirmed complies with the upfront conditions associated with the approval of the transaction.

“With the final clearance of the European Commission now granted, we are able to close the transaction soon, and create a leading digital telecommunication company in Germany,” said Markus Haas, CSO of Telefónica Deutschland. Rachel Empey, CFO of Telefónica Deutschland, added: “By combining the strengths of both Telefónica Deutschland and E- Plus, the new company is well positioned to challenge the market with even more innovative products and services, combined with a great customer experience.”

Opinion is divided regarding the optimal number of operators in a country, and consolidation is a fact of life in any industry as it matures. But with regulators giving operators such a hard time on things like roaming charges in Europe, and operators facing plenty of competition from OTT players, etc, it seems the EC has decided to adopt a more relaxed approach to operator pleurality. For now.

Tags: , ,

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.