There are several obstacles that MásMóvil and Orange have overcome to reach the position they are in. the fusion currently. Although the concern that this union represents has not been resolved, and all because the Commission does not welcome the reduction in the number of operators.
Throughout these 18 months, since this operation was announced in March 2022, both operators have worked to carry out this union. Not only have they had to cope with the brakes of Europe, also from the National Markets and Competition Commission. To this we must add the emergence of the Saudi giant STC, which bought 10% of Telefónica. An action that puts pressure on Brussels in its final decision on the merger.
The reasons for Brussels
At the end of last July, the European Commission indefinitely postponed the investigation of the merger with the aim of having more time to “evaluate the impact that the operation has on competition.” And this aspect is one of the points that has always worried Brussels.
Initially, the date to give the green light to this merger was set for the past day 4th of September. But this is something that completely changed by postponing said investigation indefinitely. On the other hand, Orange has already announced the reduction of up to 500 million euros in its capital in order to be on par with the MásMóvil operator. A very clear movement to be able to avoid the fearsome ‘remedies‘, that is, that series of obligations so that competition can be guaranteed. A clear example could be the mandatory sale of a part of its infrastructure so that other companies can exploit them.
What is clear is that the operation between Orange and the MásMóvil Group will change the telecommunications landscape in Spain, if they finally get Brussels to approve the merger. And if in the end they force operators to comply with this series of ‘remedies’, there are operators who can benefit from this operation, as is the case of DIGI.
He Scope Ratings analystJacques de Greling, considers that, if the European Commission were to demand the existence of a fourth mobile operator in Spain, «most likely around the Spanish subsidiary of DIGI«. Therefore, Orange and MásMóvil should sell part of their network infrastructure to the Romanian operator.
For this reason, one of the main objectives of Orange and MásMóvil is that Brussels avoid the dreaded ‘remedies’, so that they do not have to get rid of different assets to comply with competition regulations. Hence the investigation is now at a dead end. And the approximate date to know the final conclusion of the investigation carried out by the European Commission is unknown.
In addition to DIGI, there are also other companies that see an opportunity for the future in this operator, such as Avatel or even Finetwork. And we should not rule out other foreign operators that want to enter the Spanish market.
Competition in the spotlight
Without a doubt, what is most worrying in Brussels is competition. And this merger could be a problem for the sector. This is not the first time that the European Commission has rejected a merger of these characteristics.
It already happened in Denmark in 2016, when the union between Telia and Telenor was denied. Just as different points against each other emerged between the merger of O2 and Three in the United Kingdom. And of course, we must remember the conditions that were imposed at the time with the purchase of Jazztel by Orange. For this reason, we only have to wait What are the Commission’s demands? and, above all, know its final verdict.