They want to create a joint venture valued at more than 18 billion euros. Telecom groups Orange and MasMovil in Spain will be the subject of an in-depth investigation into the merger of their activities, Brussels announced on Monday April 3, citing competition concerns.
The operation would reduce the number of telecommunications network operators in Spain from four to three, the European Commission has pointed out. in a press release, saying they fear a reduction in competition in fixed and mobile broadband services as well as in “multiple play” bundled offers. And to add:
“This might lead to higher prices and lower quality of services for consumers. »
The European Commission is also concerned that the new group may have the ability to restrict access to mobile and fixed networks of virtual operators who do not have their own infrastructure, thus reducing their ability to compete.
Call for consolidation of the European market
The French giant Orange and its Spanish competitor MasMovil, respectively the second and fourth largest operators in the country, announced in July the plan to merge their activities in Spain. The operation should give rise to a “50-50” joint venture valued at 18.6 billion euros.
The stated objective of the two groups is to complete the project during the second half of 2023 ” at the latest “, subject to approval by the competition authorities. The operation was notified on February 13 to the European Commission, guardian of competition in the EU. After the opening of the in-depth investigation, it now has ninety working days, i.e. until August 21, to render its decision.
Orange and MasMovil justified the creation of their joint venture on the grounds of efficiency gains, among other things. They might thus “accelerate investments in fiber optics and 5G”. Several leaders of European operators have recently called for market consolidation on the continent to reduce competition and increase their profitability, at a time when they are investing heavily in these technologies.