EU clears Telefonica/E-Plus deal

|About: Telefonica S.A. (TEF)|By:, SA News Editor

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.