EU authorizes purchase by Orange Jazztel – The Economist

The European Commission approved the acquisition of the Spanish telecommunications operator Jazztel by the French Orange, albeit with conditions to “ensure effective competition” in the Spanish market of fixed internet access.

The European Commission approved on Tuesday the purchase of the Spanish telecommunications operator Jazztel by the French Orange, albeit with conditions to “ensure effective competition” in the Spanish market wired internet access.

The operation, of 3,400 million euros, would combine the third and fourth suppliers of fixed telecommunications services in Spain.

“Something very important before approving Jazztel absorption by Orange was to ensure that Spanish consumers would not have to bear higher by the fixed internet access prices, “said the European Commissioner in charge of competition policy, Margrethe Vestager.

The Commission, which had initiated a “thorough investigation” of the operation, concluded that the new entity “would have less incentive to compete aggressively against other operators’ present in Spain, these are Movistar, Telefonica, and the group British Vodafone.

The reduction from four to three operators in the Spanish market would have discouraged the entry of a new service provider “high investment required to enter the retail market” service internet access Fixed, added the Commission.

Therefore Orange made proposals, accepted by the Commission to give its backing to purchase.

First the French Orange undertook to sell a network optical fiber reaching from 700.000 to 800.000 units, similar to the size of the current Orange fiber network in Spain.

“This high-speed network covering 13 urban municipalities in five major Spanish cities : Madrid, Barcelona, ​​Valencia, Seville and Malaga, “the Commission

Orange also proposed that the buyer of the fiber optic network has access to the ADSL network for a period of eight years.” an unlimited number of subscribers and allow the purchaser to compete immediately in 78% of Spanish territory. “

The French company also pledged to grant access to the buyer of the fiber network to its mobile network including 4G services.

“The corrective measures taken together ensure that quarter nationwide provider to enter the Spanish market and compete effectively,” the Commission said in the statement.

The French operator Orange announced on September 15 the launch of a friendly for 100% of Jazztel tender offer (OPA) for a total of 3,400 million euros, ie 13 euros per share.

ERP