The European Comission does not view the merger between the Spanish subsidiary of Orange and MasMovil very favorably. This has been made clear in the report that has been sent to both operators and which includes their opinion on the proposed union of both operators, as well as the obstacles and doubts that the operation raises.
Among the main ones is the suspicion that the joint venture that will result from the merger could reduce competition in the offer of mobile and fixed internet services, in addition to leading to a lower number of available convergent packages. Currently, Orange and MasMovil are, respectively, the second and fourth operators of fixed and mobile internet services in Spain.
In total, there are four active mobile operators in the country, and several fixed and mobile virtual network operators, which use the infrastructure of the other four network operators to offer mobile and fixed telecommunication services to consumers.
From the EU they recall that on April 3, the Commission opened an in-depth investigation to assess whether the merger proposal between Orange and MasMovil can restrict competition in the Spanish market for the sale of convergent packages, mobile telecommunications services and services fixed internet access.
From then until now, the Commission has carried out a detailed investigation to understand how the operation would affect the market, and the impact it could have on it. Among the steps taken in the investigation is the analysis of internal documents offered by the parties, as well as the compilation of the points of view in this regard from competitors, suppliers and customers.
As a result of this investigation, the Commission is concerned about the possible reduction in the number of network operators in Spain, which would reduce competition in mobile telecommunications services, fixed internet and convergent packages. The Commission is also concerned that this will lead to significant price increases for affected consumers in the Spanish market.
Of course, for now the Commission has only issued a statement of objections to the operation, which is one more step in the investigation that it has open. In it, the affected companies are informed, in writing, of the objections that the Commission makes to the operation. This does not mean that the result of the investigation will be prejudged by them, although it is likely that both companies will have to make some changes in their initial plans in order to continue with their merger.
For now, we will still have to wait a few weeks to find out the final verdict, to which both Orange and MasMovil may present allegations. As a deadline, the verdict will have to be issued before next September 4.
