European regulators oppose EC proposals for E-Plus/Telefónica deal

23 June 2014 | Kavit Majithia


Telefónica’s E-Plus acquisition is further in doubt after only two of 12 national regulators supported concessions added to get the deal passed.

According to a report in the Financial Times, only Sweden and Belgium approved the deal, which would consolidate Germany’s third and fourth-largest players, at a meeting to review the EC’s decision to approve the deal.

Five countries abstained from the vote, including France, Spain, Denmark, the Netherlands and Portugal, while Germany, Ireland, Austria, Italy and the UK voted against the remedies proposed by the EC. These include provisions for Telefónica to lease network capacity to its rivals if the deal is approved, in a bid to maintain competition.

The EC’s advisory committee vote is often a formality, and it is not binding.

There are hopes from Telefónica’s European rivals that the deal will now be reconsidered, although the commission has stated in the past that all of the voting parties need to be against the proposal for a change in stance.

All 12 regulators said that without the remedies to the deal, the merged company would cause an increase in prices and stifle competition.

Telefónica has proposed that it will offer 20% of its network capacity to MVNOs, but a German anti-trust regulator has told the EC that such concessions would not compensate for the loss of a network operator in the country.