News
The merger, which was first announced in June 2022, is worth €18.6 billion
After an in-depth investigation was opened into the potential transaction in April last year, the European Commission has approved the creation of a 50:50 joint venture (JV) between France’s Orange and Spain’s MásMóvil.
The JV’s approval was conditional on Romania’s Digi (the largest MVNO in Spain) acquiring spectrum from MásMóvil in order to become a new fourth mobile operator.
The initial investigation was concerned that the transaction would restrict market competition by creating the largest operator in Spain in terms of customers and reducing the number of players in the market from four to three.
To combat these concerns, Digi, which also has operations in Portugal, Italy, and Belgium, finalised a spectrum transfer agreement with the two Spanish firms in December last year, worth €120 million. The spectrum acquired is set to be 2x10MHz in the 1,800MHz band, 2x10MHz in the 2.1GHz band, and 20MHz in the 3.5GHz band. As a result of this, Digi can take the place of a fourth MNO in the Spanish market, providing a solution to the market’s competition problem.
Orange CEO Christel Heydemann has emphasised that the deal will allow increased scale, innovation, and investment in Spain as a result of the “stronger and more sustainable” unified player.
“The commitments offered by the parties will enable Digi, the largest and fastest-growing mobile virtual network operator in Spain, to replicate the strong competitive pressure exerted by MásMóvil,” EU antitrust chief Margrethe Vestager said in the announcement’s press release.
“They will ensure that consumers in Spain continue to benefit from a competitive telecom market, in terms of prices, quality and 5G connectivity,” she continued.
However, Kester Mann, Director of Consumer and Connectivity at CCS Insight, warned that the deal’s approval will mean the spotlight is turned towards Vodafone and Three in the UK.
“Both parties will hope that the news represents a shift in position from the region’s regulators as they seek approval to combine,” he said in a LinkedIn post, but warned that the UK Competition and Markets Authority will not be won over easily.
Keep up to date with the latest international telecoms news by subscribing to the Total Telecom daily newsletter
Also in the news:
VMO2 records £3.3bn loss as interest rates begin to bite
Verizon to trial private 5G networks at NHL stadiums
From humble beginnings: The amazing journey of Hormuud Telecom CEO Ahmed Mohamud Yusuf