Orange acquisition of Jazztel cleared after concessions

The European Commission has finally given the acquisition of Spanish fixed-line player Jazztel by French mobile operator Operator Orange the green light, subject to some concessions from Orange.

The deal was first announced last September, with the EC declaring it wanted to take a closer look three months later. Citing competition concerns, especially over multiplay in Spain where Orange has a 32% share of mobile subscribers, the EC said it also wanted to make sure the acquisition wouldn’t reduce the country’s FttH footprint.

In the end it was in the area of FttH that Orange has to make concessions in order to gain EC approval. Orange will divest part of the Jazztel FttH network that is equivalent in size to the fibre network Orange already has and will grant the acquirer of that divested network access to Jazztel’s ADSL network under predetermined terms. Lastly that acquirer will also have the option to use Orange’s network for MVNO purposes at the same rate Orange is currently charging Jazztel.

“A very important thing before agreeing to Orange’s takeover of Jazztel was to make sure that consumers in Spain would not suffer from higher prices for fixed internet access services,” said Commissioner in charge of competition policy Margrethe Vestager. “With the remedies in this merger a new player may enter the market and compete as strongly as Orange and Jazztel do today.”

Orange made no formal statement by issued a press release expressing its satisfaction with the ruling, while noting the deal is still subject to approval from the Spanish Authorities. Assuming that happens the Spanish telecoms market will echo the multiplay consolidation happening in much of the rest of Western Europe.