By giving various MVNO concessions, Telefonica has all but sealed EU approval for the acquisition of E-Plus, KPN’s German business unit, according to Reuters’ sources.

In a long-running guessing game about which way the European Commission will decide, “two people with knowledge of the matter” claimed Telefonica is home and dry.

“The European Commission will clear the deal,” said one.

Telefonica’s willingness to clinch MVNO deals with three smaller players – Freenet, United Internet and Drillisch – has apparently swung things in favour of the Spanish incumbent.

One concession on the table, according to the sources, is allowing smaller operators to lease at least a fifth of the merged company’s network capacity.

Not everyone is happy about the prospect of network consolidation in Germany. Only this week the country’s anti-trust watchdog expressed concerns about reducing competition.

Moody’s, on the other hand, recently warned that by imposing tough conditions on network mergers, the European Union is in danger of heating up price competition rather than reducing it through sector consolidation.

The ratings agency pointed to stringent ‘competition remedies’ required in Ireland before the EU was willing to wave through the merger of O2 and Three, the respective subsidiaries of Telefonica and Hutchison Whampoa.