Subject to compliance with a commitments package offered by Altice, Allianz and Omers, the Commission completed its investigation which found the deal would raise a number of competition concerns, including fears that the transaction would lead to significant horizontal overlaps on the wholesale Fibre-to-the-Office (FTTO) access networks market and creating a large market leader both nationally and in multiple local markets.
There were also concerns that Covage would become vertically integrated into SFR's retail activities, giving the merged entity the ability and incentive to shut out retail competitors from competitive access to Covage's fibre capacity at wholesale level.
There were no concerns that the transaction would create competition concerns in any other markets.
To remedy these competition-based concerns, in the two aforementioned areas, SFR FTTH has committed to the following remedies. Firstly to divest 25 subsidiaries and assets belonging to Covage's local fibre loop business connected to 30 public institutions. These assets include several mixed FTTO and FTTH networks and represent approximately 95% of Covage's FTTO business.
Additionally, the company will offer a transitional service agreement, which includes access to all assets and services required to operate the divested business competitively for a set period. This will enable the divested business to become fully independent from SFR FTTH.
"Covage is the leading independent provider of wholesale access to fibre capacity in France. Particularly in low population density areas, where internet access is more difficult to obtain. It is important for local authorities to have alternative suppliers for the construction and management of high-quality fibre-to-the-office networks,” said Margrethe Vestager (pictured), executive vice-president, European Commission, in charge of competition policy.
“Covage directly competes with the Altice owned company SFR on these markets, so we approved the acquisition of Covage thanks to comprehensive divestments to ensure that competition will remain to the benefit of local and international customers and consumers in France”.
No date for when this commitments must be met was given.
