Telefonica, E-Plus deal subject to regulatory tug-of war – Mobile World Live

Telefonica, E-Plus deal subject to regulatory tug-of war

10 JAN 2014

The German antitrust regulator submitted a request to the European Commission for permission to review the €8.6 billion deal for Telefonica to acquire operator E-Plus from Dutch operator group KPN.

The European Commission yesterday confirmed to The Wall Street Journal that it received a reminder from the Bundeskartellamt to ask that it gain power to review the deal instead of European regulators.

In December, the European Commission opened what it termed an “in-depth investigation” into the deal, which by default rejected the initial request by the German body to examine the deal.

Bundeskartellamt officials believe the deal will only affect the national market while those in Brussels believe it will have a broader impact.

Concerns include the fact the deal would reduce the number of mobile operators in the German market from four to three, leading to reduced competition and higher prices. The new entity would be the market leader in terms of customers, ahead of Deutsche Telekom and Vodafone.

The two other operators could subsequently have fewer incentives to grant access to their networks to MVNOs and other service providers. MVNOs would also have a smaller choice of host networks, weakening their negotiating power.

EU merger rules allow national competition bodies to request a reminder of the initial demand to review the deal. This can take place even after the European Commission has started an investigation.

A Commission representative told WSJ the body has until 12 February to decide whether to accept or reject the referral request.

If the request is rejected, the European Commission is due to come to a decision by 14 May, 90 working days after the investigation was launched.

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Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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