The European Commission (EC) announced on Monday the opening of a comprehensive investigation into the planned merger between Orange and MásMóvil, saying it is concerned that the operation "could reduce competition in the retail provision of mobile and fixed broadband services and in the offer of multiple service packages in Spain".
In a statement, Brussels warned that this merger between two of the main mobile phone operators "would decrease the number of network operators in Spain, thus eliminating an innovative and significant competitor", which could lead to "higher prices and a lower quality of telecommunications services for customers".
Brussels must conclude this exhaustive investigation into the effects of this merger in the next 90 working days (that is, before August 21 of this year) and determine "if its initial reservations regarding competition are confirmed."
The operation, announced last July, implies a valuation of the company of 18,600 million euros, of which 7,800 correspond to Orange (the second mobile telephone operator in Spain) and 10,900 to MásMóvil (fourth in the same sector).
In its preliminary investigation, Brussels determined that both Orange and MásMóvil are close competitors in mobile telecommunications services, fixed broadband access and multi-service packages, and that both are part of the four companies in Spain that operate mobile telephony, together with Telefónica and Vodafone.
Together, the European Commission continues, "they would have the ability and the incentive to restrict the access of virtual operators to the wholesale mobile network and wholesale fixed network access services."
"This could reduce the ability of these operators to compete, which in turn can translate into higher prices and lower quality of services for end customers in Spain," warned the Community Executive.
Already last Tuesday, the CEO of Orange Spain, Ludovic Pech, estimated that the European Commission (EC) would notify the company of "a deeper investigation phase" of the study of its merger with MásMóvil, in which, he announced, the company "will work perfectly"
On the other hand, the European Commission also indicated that the request for referral of this matter that had been transmitted to it by the National Commission for Markets and Competition (CNMC) is "pending".
