02/20/2024 | Press release | Distributed by Public on 02/20/2024 07:55
The European Commission has approved, under the EU Merger Regulation, the proposed creation of a joint venture by Orange and MásMóvil. The approval is conditional upon full compliance with a commitments package offered by Orange and MásMóvil.
Today's decision follows an in-depth investigation of the proposed transaction. Orange is a full mobile network operator whileMásMóvil is a hybrid mobile network operator. MásMóvil relies on its own mobile network, which does not cover the entire Spanish territory, and on a national roaming agreement with Orange to provide retail mobile services. There are two other mobile network operators active in Spain (Telefónica and Vodafone). There are also several mobile virtual network operators ('MVNOs') which use the mobile network operators' infrastructure to offer retail mobile services to consumers. Digi is the largest MVNO in Spain.
The Commission's investigation
During its in-depth investigation, the Commission gathered extensive information and received feedback from market participants and other stakeholders.
Following its investigation, the Commission had concerns that the transaction, as initially notified, would restrict competition in the retail markets for the supply of mobile and fixed internet services in Spain, whether offered standalone or in bundles.
In particular, the Commission found that:
The remedies
To address the Commission's competition concerns, Orange and MásMóvil committed to:
Today's decision also approves Digi as a remedy taker following a careful review of Digi's business plan with the help of an independent adviser. Digi is a suitable purchaser for the divested spectrum as it is currently the largest and fastest-growing MVNO in Spain. Digi also has experience as a mobile network operator in other EU Member States such as Romania. Moreover, Digi has a relatively large, fixed broadband (fibre) network in Spain, which it continues to build. As a result, the commitments do not include any fixed broadband assets.
After collecting the feedback from a wide variety of market participants during a market test of the proposed commitments, the Commission concluded that they fully address the identified competition concerns and will preserve a competitive telecom market in Spain, both in terms of price and quality, as well as in terms of 5G network deployment, to the benefit of consumers.
The Commission therefore concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments. Under supervision of the Commission, an independent trustee will monitor their implementation.
Companies and products
Orange, headquartered in France,is a global telecommunications operator active in the Spanish electronic communications market through its subsidiary OSP. OSP provides mobile and fixed electronic communication services to residential customers, business customers and wholesale customers in Spain. It operates under three brands: Orange, Jazztel, and Simyo.
MásMóvil is controlled by Lorca, a holding company headquartered in the UK. MásMóvil provides fixed and mobile electronic communication services mainly to residential customers in Spain. It operates under a wide variety of brands, such as Yoigo, MásMóvil, and Virgin, as well as digital-focused brand Pepephone, regional brands Euskaltel, R., Guuk, Embou and Telecable and international customers brands Llamaya, Lebara, Lycamobile. MásMóvil's own network is based on mid-band and high-band spectrum, which are mainly suited for providing mobile services in urban areas. It does not own any low-band spectrum, which is generally used for deploying mobile networks in rural areas.
Merger control rules and procedure
The transaction was notified to the European Commission on 13 February 2023 and the Commission opened an in-depth investigation on 3 April 2023. On 27 June 2023, the Commission issued a Statement of Objections to Orange and MásMóvil setting out its preliminary competition concerns.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the European Economic Area or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
In addition to this transaction, there are currently two ongoing Phase II merger investigations: (i) the proposed acquisition of ITA Airways by Lufthansa; and (ii) the proposed acquisition of Air Europa by IAG.
For more information
More information will be available on the Commission's competition website, in the public case register under the case number M.10896.
Orange and MásMóvil's joint venture threatened competition in the retail supply of mobile and fixed internet services in Spain. But the commitments offered by the parties will enable Digi, the largest and fastest-growing mobile virtual network operator in Spain, to replicate the strong competitive pressure exerted by MásMóvil. They will ensure that consumers in Spain continue to benefit from a competitive telecom market, in terms of prices, quality and 5G connectivity.
Margrethe Vestager, Executive Vice-President in charge of competition policy