European Commission Greenlights Orange-MasMovil Union in Spanish Telecom Sector
After a year and a half of anticipation, the European Commission has granted approval for the merger of Spain's second and fourth largest telecom operators, Orange and MasMovil. However, this approval was contingent upon concessions made by the companies, including the transfer of spectrum to competitor Digi to address competition concerns.
Negotiations between Orange, MasMovil, and EU regulators have been protracted, spanning 18 months. The European Commission, in its decision, emphasized that the remedies agreed upon "fully address the competition concerns" and will "ensure a competitive telecom market in Spain in terms of prices, quality, and 5G rollout, benefiting consumers."
When the Commission initiated an in-depth investigation in April 2023, there were concerns that the merger could reduce the number of operators in Spain from four to three, potentially leading to significant price increases. To mitigate these concerns, Orange and MasMovil committed to transferring spectrum holdings to virtual network operator Digi, thereby enhancing its network capabilities. Additionally, Digi will have the option to enter a roaming agreement to utilize the Orange-MasMovil network in areas where coverage is lacking.
CEO Christel Heydemann of Orange lauded this development as a "major step forward" for the company's expansion in Europe. She emphasized that the combined entity will attain "critical mass to innovate and invest for the future." Orange and MasMovil are now working towards finalizing the deal by the end of Q1 2024, as initially announced in July 2022.
The Commission's approval sets a precedent and may pave the way for other consolidation plans within Europe's telecom sector. Mergers are viewed as facilitating operators' ability to invest in broadband networks, which are crucial for both businesses and consumers. As a result, deals in Portugal, Denmark, and elsewhere are now encountering reduced regulatory uncertainty.