GSMA Welcomes EC’s Conditional Approval on Telefonica and E-Plus Merger

London based GSM Association (GSMA) welcomes the European Commission’s approval on proposed acquisition of Dutch Telecom operator KPN’s German mobile telecommunications business E-Plus by Telefónica Deutschland (Telefónica). The EU has ealier granted conditional approval for the merger spelling out certain conditions, including the “sell, before the acquisition is completed, up to 30% of the merged company’s network capacity to one or several (up to three) MVNO(s) in Germany at fixed payments”. 

Anne Bouverot, Director General, GSMA released a full text commenting on the regulatory body’s approval.

Consolidation will benefit EU consumers and businesses and it is important that EU competition policies do not distort markets or disincentivise investment. Constraining regulation means that the EU’s communications markets continue to lag behind those of the USA and Asia, with consumers and businesses in Europe experiencing slower connection speeds and many still denied access to the latest 4G broadband technologies.  The GSMA believes that a major impact of consolidation is an increase in long-term investment.

Market fragmentation prevents Europe’s network investors from capturing the economies of scale and scope that, for example, America’s two largest carriers have access to – each of which is larger than the three biggest European carriers, combined.  Commissioner Almunia emphasised the need to continue to drive towards a single European telecommunications market, making specific reference to pan-European spectrum management and a unified regulatory regime.  The GSMA supports these goals, the delivery of which would underpin the fundamental reforms needed in Europe’s competition/merger review processes.

In a rapidly changing market, characterised by strong growth in data consumption and new sources of Internet-based competition, we believe consolidation in the European telecoms market is essential to boost investment and deliver innovative, new consumer services.

While the decision to allow the merger in Germany to go ahead is welcomed, efforts should be redoubled to reduce constraints on market driven restructuring.  A streamlined merger review process and reduced remedies are essential. This change can only be achieved by a comprehensive review of Europe’s antitrust framework.”

–  Anne Bouverot, Director General, GSM

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