Combined O2, E-Plus may have to surrender spectrum

6 Aug 2013

Telefonica Germany (O2) and E-Plus could be forced to hand over some wireless frequencies following the proposed merger of the two mobile operators, Bloomberg cites a letter from the Federal Network Agency (FNA) as saying. Iris Henseler-Unger, vice president of Germany’s telecoms regulator, has written to Thorsten Dirks, CEO of E-Plus, and Telefonica Deutschland Holding’s Rene Schuster, saying that their mobile spectrum licences were granted under the condition that the holders remain independent. ‘As a rule, the FNA must guard the competitive independence of owners of frequency rights in an area of scarce resources,’ Henseler-Unger wrote, adding: ‘Ultimately, the FNA can enforce this by withdrawing the frequency assignment.’ The report adds that the watchdog will examine the proposal and has asked the companies to provide information within two weeks, according to the letter dated 25 July. The FNA will have to review whether the frequencies will still be ‘efficiently used’ and whether the merger would hamper competition.

As reported by CommsUpdate, Dutch telecoms group KPN announced last month that it had agreed to sell E-Plus to Telefonica Deutschland for EUR5 billion (USD6.6 billion) in cash and a 17.6% stake in the combined entity post transaction. The merger of Germany’s third and fourth largest mobile network operators by subscribers will create a stronger competitor to larger players Telekom Deutschland and Vodafone Germany. Telefonica said the deal will result in an operator with 43 million customers and combined revenues of EUR8.3 billion (end of 2012).

Germany, E-Plus Group, Telefonica Deutschland Holding