EC to Approve Orange-Jazztel Merger


Orange’s proposal to take over Jazztel will get approval from European Commission. Reports suggest that European Commission is set to vote its approval for the acquisition of Spanish Telecom operator. The France based telecom operator, Orange had proposed 3.4 billion euros for taking over UK based Spanish operator Jazztel.

Orange’s acquisition of Jazztel will have implications in Spanish broadband market. Orange submitted a number of concessions to the European Commission in an attempt to ease concerns about the competitive implications of the takeover. The concessions included a commitment to sell overlapping assets, including parts of Jazztel’s fiber optic network, and to offer broadband capacity to rivals on a wholesale basis.

The European Commission’s antitrust authority accepted the concessions with some modifications, and will clear the merger by June 2015, which is the deadline set for approval.

Acquisition of Spanish fixed telecom service provider, Jazztel who owns extensive network of fiber optic cables will give competitive edge to Orange in Spanish telecom market. The deal will help Orange better compete with Vodafone (VOD.L) in the Spanish market. Orange’s acquisition of Jazztel can be compared with Vodafone’s acquisition of cable operator Ono last year.

Orange had offered to sell overlapping assets with Jazztel, including parts of Jazztel’s fiber optic network, and to wholesale ADSL (broadband) capacity to rivals. Jazztel currently sells mobile services as a mobile virtual network operator using the Orange network.

Spanish media reports suggests that Orange has been given time until June 25, 2015 to wholesale broadband capacity to one of the Spanish competitors. The main candidates for this offfer are Yoigo and MasMovil, who would be given wholesale access to Jazztel’s fixed line network.

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