EC approves Orange’s Jazztel purchase, subject to conditions

20 May 2015

Orange Group’s proposed acquisition of alternative Spanish broadband provider Jazztel has been given the go-ahead by the European Commission (EC). In a press release confirming the development, the European body noted that its approval for the transaction is, however, conditional upon the full implementation of a number of commitments that ‘will ensure effective competition on the fixed internet access services markets after the takeover’.

With the EC having initially had concerns that the acquisition could have led to higher fixed broadband prices for consumers, it noted that France-based Orange’s decision to submit commitments to ensure that a new competitor can enter the high speed internet retail markets helped address these. Specifically, it has been confirmed that the commitments submitted by Orange were based on two different technologies, the first of which relates to fibre-optic connectivity. For services based on such technology, Orange has committed to divesting an independent fibre-to-the-home (FTTH) network covering between 700,000 and 800,000 premises in 13 districts of the country’s five largest cities: Madrid, Barcelona, Valencia, Sevilla and Malaga. Meanwhile, with regards to copper-based connectivity, Orange has said it will grant the purchaser of the FTTH network wholesale access to Jazztel’s national ADSL network for up to eight years; this commitment is for an unlimited number of subscribers and will allow the purchaser to compete immediately on 78% of Spanish territory. Alongside this, Orange has also promised to allow the company that acquires the FTTH network wholesale access to its cellular infrastructure, including 4G services, unless the purchaser already has access to a mobile network; such access will be on terms that are ‘at least as favourable as those Orange currently grants to Jazztel’.

Commenting on the EC’s decision, the Commissioner in charge of competition policy Margrethe Vestager, said: ‘A very important thing before agreeing to Orange’s takeover of Jazztel was to make sure that consumers in Spain would not suffer from higher prices for fixed internet access services. With the remedies in this merger a new player may enter the market and compete as strongly as Orange and Jazztel do today.’

Spain, Jazztel, Orange Group