Spectrum concerns prompt review of O2-E-Plus deal, report says

20 Dec 2013

The European Commission (EC) is expected to examine how Telefonica’s proposed acquisition of KPN’s German unit E-Plus will affect frequency allocation in the local mobile market, Bloomberg reports, citing people with knowledge of the matter. The EC is set to open an in-depth investigation into the EUR8.6 billion (USD11.6 billion) deal today, but is not opposed to reducing the number of network operators in Germany from four to three, according to the unnamed sources. It is expected to cite concerns about competition in the wholesale and retail markets when it announces its review, but will not yet make specific demands for Telefonica and KPN, one of the people said. A combined O2 and E-Plus would hold about 387MHz of spectrum, compared with 155MHz each for market leaders Telekom Deutschland and Vodafone.

As previously reported by CommsUpdate, shareholders of E-Plus’ Dutch parent KPN approved the sale of its German mobile unit to Telefonica at an extraordinary general meeting in October, and at the end of the month the Spanish company submitted a proposal to the EC seeking approval for the deal. Following completion of the transaction, which was announced in July, KPN will receive EUR5.0 billion in cash and a 20.5% stake in the enlarged mobile operator.

Germany, E-Plus Group, KPN, Telefonica, Telefonica Deutschland Holding