Brussels, 02/07/2014 (Agence Europe) - The third set of commitments belatedly offered by Telefonica Deutschland has removed the European Commission's fears about its planned purchase of E-Plus, the German subsidiary of Dutch mobile phone company KPN. The Commission therefore gave approval on Wednesday 2 July as long as the commitments are strictly implemented.
The new commitments were made early in May, only a few days ahead of the deadline set by the Commission for deciding on the case after sending a letter outlining its concerns to Telefonica in February (see EUROPE 11028). The Commission feared that the deal, as originally notified, would reduce competition on the German mobile phone market because the number of companies would be reduced from four to three, and could lead to price increases to the detriment of consumers.
To allay these fears, Telefonica has promised to sell, before the acquisition is completed, up to 30% of the merged company's network capacity to one or several (up to three) MVNO(s) (Mobile Virtual Network Operators) in Germany at fixed payments. This would ensure that up to three MVNOs will enter or expand in the German market with the necessary degree of certainty, thus providing a ldevel of competition. Telefonica has also promised to offer to divest radio wave spectrum and certain assets either to a new mobile network operator (MNO) entrant or subsequently to the MVNO(s) which will have taken up the network capacity thanks to the first part of the commitments. Finally, Telefonica has promised to extend existing wholesale agreements with Telefonica's and E-Plus' partners (i.e. MVNOs and service providers) and to offer wholesale 4G services to all interested players in the future.
Quizzed about a possible price rise in Germany (as happened in Austria), Commissioner Almunia said that the Commission made a mistake by allowing an unconditional merger of telecoms operators in Austria and had tightened up the strings attached to authorisation of the E-plus deal. “Consumers will continue to enjoy the benefits of a competitive market”, he said. (EL)