But there are conditions attached – selling spectrum to Romania’s Digi and providing it with national roaming if requested
The European Commission has approved the proposed joint venture of Orange’s Spanish business and the regional operator MásMóvil under the European Union Merger Regulation. The deal is subject to conditions, including the sale of certain spectrum to Romania’s Digi Communications, as discussed earlier this year. Also, Digi has the option of having a wholesale agreement with the new combined entity. Digi is already Spain’s largest MVNO.
Orange and MásMóvil to complete the deal by the end of the first quarter. They announced their intention to merge their Spanish assets and operations in summer 2022, creating a business worth about €18.6 billion.
In combination they should be a fearsome competitor to the leading operator, Telefonica, in a very tough market. Orange is a national mobile operator in Spain while MásMóvil is regional and offers fixed and mobile connectivity.
Kester Mann, Director, Consumer and Connectivity at analyst house CCS Insight, commented, “Approval of the Orange-MásMóvil deal will be cheered by the European telecoms sector, which has repeatedly made the case to be allowed to join forces. Attention will therefore quickly turn to other potential mergers, notably the tie-up between Vodafone and Three in the UK.”
Lost in translation?
“But they should be cautious,” Mann warns, “This deal will be reviewed by the UK’s Competition and Markets Authority (CMA) whose stubbornness last year…shows it won’t be won over easily.” Initially the CMA blocked the proposed tie-up between Microsoft and Activision Blizzard.
He adds, “And while Ofcom has recently softened its stance on mergers since its vehement opposition to the doomed Three-O2 merger several years ago, it will still want to see evidence that a combined Vodafone and Three will lead to better outcomes for customers in a mobile market it believes is currently functioning reasonably well.”
Orange and MásMóvil got the deal over the line by promising to deliver a package of remedies with new market entrant Digi. Mann observes that if a similar approach proves necessary in the UK, “it may not be easy”.