Germany: O2 entices regulators with new telco merger trend

As EU regulators heighten their scrutiny of telco mergers in the region, reports say wireless firms are employing a new tactic to entice authorities to approve their buyouts.

Companies are now offering to lease their own spectrum to a new competitor as authorities are reluctant to clear buyouts that reduce the number of wireless players. But it’s a tactic not often successful in its efforts.

Telefonica O2 is the latest to try out the technique as it looks to acquire E-Plus, owned by KPN. As the European Commission denied Germany’s request to review the merger itself, Telefonica is now faced with convincing the EU that such a merger would allow the company to compete more strongly against top rivals T-Mobile and Vodafone.

Telefonica has reportedly proposed spinning off a new rival to enter the market through divesting spectrum; reports say the new company would be intended to replace the acquire E-Plus.

But the tactic was the same one attempted by Bouygues when it looked to acquire SFR in France, though Bouygues lost its bid attempt to Numericable.

Similarly, 3 Ireland has reportedly offered to create a new wireless rival to win regulatory approval of an O2 Ireland acquisition.

Full Content: Rethink Wireless

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