Meanwhile, speculation continues about what Vodafone will do with its struggling Spanish opco
No surprise that the European Commission has sent a statement of objections to Orange and MásMóvil about their proposed €18.6 bilion merger in Spain.
The operators are the second and fourth largest providers of mobile and fixed services in the country, with Telefónica being the biggest and Vodafone third in the rankings.
The script is well worn – the EC is concerned that the “proposed joint venture may reduce competition in the retail supply of mobile and fixed internet services as well as of multiple-play bundles in Spain.”
Three is always worse than four
And that old hobbyhorse – the EC believes, and that word is chosen deliberately, that going from four to three operators will wipe out “significant competitive constraint and innovative rival in the Spanish retail markets for mobile telecommunications services, fixed internet services and multiple-play bundles (including fixed mobile convergent ones).
The Commission claims its statement “does not prejudge the outcome of the investigation. Orange and MásMóvil now have the opportunity to reply to the commission’s statement of objections, to consult the commission’s case file and to request an oral hearing”.
This is going to be a really tough argument for Orange to win. Maybe it could supply a copy of Strand Consult’s research based on empirical evidence rather than belief, which argues four to three often makes sense for all stakeholders.
Certainly the Commission seems to have little grasp of how tough the market conditions are in Spain.
Vodafone wants out?
On which note, rumours that Vodafone is close to making a decision about its Spanish opco continue, most recently in the Spanish newspaper Expansion. Unnamed sources say Vodafone is examining options with advisors including Morgan Stanley and Garrigues.