Germany’s competition watchdog is voicing concerns about Telefonica’s proposed bid for KPN’s E-Plus – even as the deal seems to be nearing regulatory approval with the European Commission – reports the Financial Times.

Telefonica has grown increasingly confident the deal will be approved in Brussels, albeit with concessions that will see rivals accessing the combined entity’s network, according to people familiar with the matter.

However Germany’s Bundeskartellamt – the country’s antitrust authority – has raised concerns about the proposed remedies agreed with the EC, said sources. The commission would not comment.

Questions are thought to centre on the trade-off between MVNOs getting access to Telefonica/E-Plus’s network and the reduction of Germany’s operators from four to three.

The antitrust authority is worried there would be a net loss of competition in the country’s mobile market as a result of this arrangement.

Shareholders have grown more confident the deal would gain approval so the opposition of the German competition authority is a setback.

Bundeskartellamt is thought to have written a letter to the commission last month in which it expressed its concerns. Points included the practicality of a rival accessing Telefonica/E-Plus’s network on a wholesale basis.  The authority also questioned the necessity of the takeover given E-Plus is not a failing business which needs to be saved.

The EC has set a deadline of 3 July for its decision in what has become one of the key benchmark decisions on whether it will allow consolidation in Europe’s mobile industry.