German telecoms watchdog the Federal Network Agency (FNA) has said that the combined Telefonica Germany (O2) and E-Plus will have to give up some wireless frequencies if the EUR8.55 billion (USD11.8 billion) merger between the two companies receives European Commission (EC) approval, Bloomberg reports. Dutch telecoms firm KPN agreed to sell E-Plus to Telefonica in July 2013, but in December Brussels opened an in-depth investigation into the transaction and has until 14 May 2014 to make a decision on the matter. If concluded, KPN will receive EUR5.0 billion in cash and a 20.5% stake in the combined entity, reducing the number of network operators from four to three, with the enlarged Telefonica becoming the market leader ahead of Telekom Deutschland and Vodafone Germany. In a document published on its website, the FNA said that the combined entity will hold more than half of all available 900MHz and 1800MHz frequencies. The regulator said that should the merger receive EC approval, it plans to start an allocation process this year for 900MHz, 1800MHz and other frequencies. Interested parties have until 11 April to submit their opinion on the FNA’s recommendations, with a final decision planned for June.