Spain’s competition regulator the Comisión Nacional de los Mercados y la Competencia (CNMC), has given its first phase approval to the merger between telcos and Euskaltel.
The €2 billion transaction consists of the acquisition by MásMóvil Ibercom S.A.U. of exclusive control of Euskatel, S.A. through a public offer to acquire shares representing the entire capital of Euskaltel. The transaction is subject to approval by the competent authorities.
MásMóvil is the fourth-ranked telco in Spain. It mainly provides fixed telephony, mobile and broadband Internet services to residential customers or companies in Spain through its main brands: Yoigo, MásMóvil, Pepephone, Llamaya, Lebara, Ocean and Lycamobile.
Euskaltel is Spain’s fifth-ranked telco. It has a strong presence in Asturias, Galicia and the Basque Country where it has deployed its own fixed cable network with a wide coverage and in which it develops its activities through its brands, Telecable, R Cable and Euskaltel. It has recently expanded its activities to the rest of Spain through the Virgin Telco brand.
The CNMC considers that the operation does not significantly alter the competitive situation. At the national level, MásMóvil strengthens its position as the fourth operator in the retail markets; the presence of Euskaltel was still limited, so the addition of quotas will not be very significant. In the case of Asturias, Galicia and the Basque Country, where Euskaltel has an important market share in the retail field and a strategy that presents differential aspects with respect to MásMóvil, there are other significant operators that will continue to exert competitive pressure.
As regards wholesale markets, while the resulting entity will strengthen its position as the main applicant for wholesale services, this is not expected to substantially change the conditions of competition given the existence of vertically integrated operators with significant shares on retail markets.
The market test carried out by the CNMC among several operators in the sector has shown that the operation does not pose significant problems for competition and is valued by these operators in a positive way within the framework of the consolidation process that has been taking place in the sector.
In view of the foregoing, the CNMC has authorised the concentration in the first phase without commitments.