Benchmark Telefonica/E-Plus deal approved – Mobile World Live

Benchmark Telefonica/E-Plus deal approved

01 SEP 2014

One of Europe’s key consolidation deals is moving ahead with the European Commission giving final clearance for Telefonica Deutschland to acquire German rival E-Plus.

The conditions attached to the sale of E-Plus, which reduces the number of network operators in Germany from four to three, could serve as benchmark for consolidation in other European markets.

The combination of E-Plus and Telefonica Deutschland will offer a more substantial rival to market leaders Vodafone and T-Mobile.

On 2 July this year, the Commission granted conditional approval for the deal but now the clearance is complete.

Key to closing the deal was Telefonica Deutschland’s agreement to sell upfront 20 per cent of its network capacity to Drillisch, an existing MVNO.

The capacity is being sold under a mobile bitstream access model that is preferable to standard resale arrangements. Drillisch is the sole purchaser of the capacity.

There is an option for Drillisch to take a further 10 per cent network capacity.

In addition, Telefonica Deutschland agreed to handover shops to its newly-emboldened partner..

The commission confirmed to Mobile World Live that Drillisch met the purchaser criteria and that the agreements between operator and MVNO comply with Telefonica’s commitments.

A report last week said that the approval process had encountered a last-minute hitch but this proved to be a false alarm.

Telefonica expects to close the deal in the third quarter. It will now “execute the capital measures to finance the transaction”.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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