The European Commission sees considerable competition concerns in the announced merger between Orange and MásMóvil, because it fears that the number of network operators in the retail mobile, internet and multimedia package markets will be reduced, which would mean “big price increases” for the clients. It also questions whether investments will be maintained if there is less competition.
The institution concludes that the anticipated anti-competitive effects are substantial, even taking into account the potential cost savings. The doubts are collected in the Declaration of Objections known this Tuesday, a step within the standard procedure for approval of the operation, which does not prejudge the result of the investigation. The statement gives companies room to “formally respond to the Commission’s concerns”, they have stressed from Orange and MásMóvil.
The companies, who are confident that the operation will go ahead, see it as “positive” that Brussels has withdrawn its objections to the wholesale market, that an operator offers its networks to others. The focus is more on the retail sector. The Commission fears, for example, that by reducing the number of operators, “significant competitive pressure and an innovative rival in the Spanish retail markets” will also be eliminated.
“We continue to trust the result of the process and we are going to continue working to transmit to the European Commission the benefits of the operation for consumers and companies,” say the companies, who defend that investments will be accelerated -as in 5G and fiber – and customers will have more offer in innovative services.
Brussels recalls that Orange and MásMóvil are the second and fourth largest retail mobile and fixed internet service providers in Spain. Four large mobile network providers operate in the country -with Telefónica and Vodafone as well as Orange and MásMóvil-, but there are also several mobile and fixed virtual network operators that use the infrastructures of network operators to offer their services.
The Commission will make a final decision before 4 September.
