French telecoms giant Orange and Spanish rival MasMovil are on the brink of securing conditional approval from the European Union’s antitrust authorities for their proposed merger in the Spanish market, Reuters news report said.
This potential approval for a 50-50 entity signals a shift in the European Union’s antitrust stance, responding to appeals from telecom companies to adopt a more lenient approach to mergers that reduce the number of mobile operators in a country from four to three.
Orange and MasMovil, respectively the second and fourth-largest telecom providers in Spain, unveiled their merger plan in July 2022, with an enterprise value reaching 18.6 billion euros ($20.2 billion) — €7.8 billion for Orange Spain and €10.9 billion for MasMovil.
MasMovil has a coverage of more than 27 million available fiber households and 18 million with ADSL, and its 4G/5G mobile network covers 98.5 percent of the Spanish population.
MasMovil has launched its 5G services covering more than 900 cities in the Spanish territory. The MasMovil Group has close to 15 million mobile and fixed services in Spain after the Euskaltel acquisition.
European Commission’s approval comes with specific conditions, requiring Romania’s Digi to acquire spectrum from MasMovil. Additionally, an option for a national roaming service agreement with Orange is said to be part of the conditions set forth by the antitrust regulators.
Digi, in a regulatory filing in December, disclosed a 120-million-euro spectrum transfer agreement, including an extra component of 20 million euros with MasMovil. Furthermore, the filing mentioned an option for a national roaming service agreement with Orange’s Spanish unit.
The European Commission, set to make a final decision on the merger by February 15, has not provided official comments on the matter. In the past, the regulatory body cautioned that the merger might lead to reduced competition and potential price increases in the Spanish telecom market.
Digi, a rapidly expanding player in the Spanish market since its launch in 2008, reported a customer base exceeding 5.7 million by the end of the first half of 2023.