There is what Brussels says and which will undoubtedly delight the competitors of Orange and Masmovil on the Spanish telecom market. And there is what the European Commission’s antitrust services no longer say in their preliminary analysis of the proposed merger between number two and number four in sales of fixed and mobile packages across the Pyrenees.
Formalized almost a year ago, this operation should lead to the creation of a 50-50 joint venture between the Spanish subsidiary of Orange and Masmovil, for an enterprise value of more than 18 billion euros. But this plan is conditional on the approval of Brussels, so far very reluctant to intra-country concentration in the telecoms sector. For the entire sector, the forthcoming decision is a test of the real motivation of the European Union to support the emergence of operators of critical size to invest in digital infrastructure.
Pricing concerns
In this respect, the statement of objections by the Commission on Tuesday June 27 unsurprisingly questions a movement that would reduce the number of operators able to serve consumers. “The Commission is concerned about significant price increases for customers in the Spanish retail market,” reads the document to which the two groups will now be able to respond. The fear of Margrethe Vestager’s services concerns both the fixed market and the mobile market and bundled offers.
But, and Orange welcomes this, the Commission no longer mentions possible difficulties with regard to the wholesale market, and in particular the consequences of the merger for virtual telecom operators (MVNO). Without their own networks, these brands are dependent on the networks of the four, or three if the marriage goes to the end, main operators. “We positively appreciate that the European Commission has withdrawn its considerations concerning the wholesale market”, underlines in a press release the French group.
Final decision by September 4
Showing its confidence, the operator led by Christel Heydemann ures that its ociation with MasMovil will also make it possible to accelerate investments in 5G and fiber for the benefit of consumers.
“The publication of the Statement of Objections is an expected next step in the standard process which does not prejudge the outcome of the investigation”, further recalls Orange. The European Commission’s final decision is expected by September 4.
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