Orange and MasMovil are the second and fourth largest operators active in the retail and wholesale mobile and fixed broadband services sectors in Spain. In total, there are four active mobile network operators in Spain: Telefónica, Vodafone, Orange, and MasMovil. There are also several mobile and fixed virtual network operators (MVNOs) that use the network operators' infrastructure to offer mobile and fixed telecommunications services to their customers.
Preliminary concerns of the Commission
The preliminary investigation indicates that Orange and MasMovil are close competitors in the Spanish retail supply markets for: (i) mobile telecommunications services; (ii) fixed broadband access services; and (iii) multi-offer packages, including fixed-mobile convergent services.
In particular, the Commission found that
The deal would reduce the number of network operators in Spain, eliminating a significant and innovative competitor. This could lead to higher prices and lower quality telecommunications services for customers.
As a result of the transaction, Orange and MasMovil would have the ability and incentive to restrict virtual operators' access to wholesale mobile network services and wholesale access to the fixed network. This could reduce the ability of these operators to compete and, in turn, lead to higher prices and lower quality services for end customers in Spain.
The Commission will now conduct an in-depth investigation into the effects of the proposed transaction to determine whether its initial competition concerns are confirmed.
The proposed transaction was notified to the Commission on 13 February 2023. On 2 March 2023, the Spanish competition authority requested the referral of the matter pursuant to Article 9 of the EU Merger Regulation. This referral request is pending.
The Commission now has 90 working days, until August 21, 2023, to reach a decision. The opening of an in-depth investigation does not prejudge its outcome.
Companies and products
Orange, headquartered in France, is a global telecommunications operator active in the Spanish telecommunications market through its subsidiary OSP. OSP provides mobile and fixed-line telecommunications services to residential, business, and wholesale customers in Spain. It operates under three brands: Orange, Jazztel, and Simyo.
Lorca, headquartered in the UK, is a holding company that controls MasMovil. MasMovil provides fixed and mobile telecommunications services primarily to residential customers in Spain. It operates under a wide variety of brands, including Yoigo, MásMóvil, and Virgin, as well as the digitally focused brand Pepephone, the regional brands Euskaltel, R., Guuk, Embou, and Telecable, and the international customer brands Llamaya, Lebara, and Lycamobile.
Merger control and procedure
The Commission has an obligation to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that significantly impede effective competition in the EEA or a substantial part of it.
The vast majority of notified mergers do not raise competition concerns and are authorized after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or initiate an in-depth investigation (Phase II).
However, in the context of the present matter, the Phase I deadline was extended by 10 working days following a request submitted by the Spanish competition authority, in accordance with Article 9 of the EU Merger Regulation.
