Seeking Alpha

EU clears Telefonica/E-Plus deal

  • As expected, the EU has cleared Telefonica's (TEF -1.1%) $12B acquisition of German rival E-Plus from KPN (KKPNY) following a series of concessions.
  • E-Plus and Telefonica's O2 Deutschland (TELDF) unit are promising to rent out up to 30% of the combined company's network capacity, divest some spectrum, and extend existing wholesale and 4G broadband resale deals to any service provider interested in them.
  • The EU expects the concessions to spawn the creation of up to 3 new MVNOs, and thus keep competition healthy even as the number of German mobile networks gets cut to 3.
  • The clearance is expected to fuel further mobile M&A activity on the continent. EU antitrust chief Joaquin Almunia has argued cutting roaming fees and enabling cross-border services is more important for industry health than having 4 carriers in a market.
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