Telefonica Germany entered into an agreement to provide Drillisch, an MVNO, with deeper access to its network, as it looks to address competition concerns related to its proposed acquisition of E-Plus from KPN.

The deal will see Drillisch acquire 20 per cent of the network capacity that will be under the control of the merged entity. The MVNO already uses the networks of both operators to provide services to its customers.

The network capacity will be reached over a period of five years and Drillisch will have the right to acquire up to 10 per cent of additional capacity. The MVNO will have a greater opportunity to differentiate the services it offers to customers, making use of existing and future developments on the network.

The European Commission’s competition body is currently considering the proposed acquisition of E-Plus by Telefonica, which would reduce the number of mobile operators in Germany from four to three. The EC decision is expected next month.

Telefonica is making concessions to allay competition concerns the EC may have, including providing MVNOs with better access to the merged network. As well as Drillisch, Telefonica was believed to be talking to Freenet and United Internet, but Reuters sources now suggest it is no longer seeking deals with them.

A Reuters report last week suggested that the Telefonica/E-Plus deal was close to approval after the Spanish-based operator group had offered the various MVNO concessions.

However, Financial Times subsequently reported that the EC’s approval of the deal is running into widespread opposition from national regulators, with just two out of 12 supporting the Commission’s remedies in a recent meeting in Brussels.

The opposition from national regulators comes off the back of a report that the EC’s proposal is causing concern with the Bundeskartellamt, the country’s antitrust authority.

The Telefonica/E-Plus deal is seen as a key benchmark deal to establish the terms under which operators are allowed to consolidate in the European Union.