As rumours circulate about possible acquisitions, we discuss progress made – and consider the potential commitments – in three live competition reviews
Digi in line to acquire spectrum assets from Orange/MasMovil in Spain
Iliad’s latest bid for Vodafone Italia, and its reported interest in Altice in Portugal, have got tongues wagging once again about M&A in the European telecoms sector. While these potential deals are still in their preliminary stages, other proposed transactions could soon come to a head, with different remedy packages currently under consideration. As we’ve previously explored, commitments in past four-to-three mobile mergers have varied from MVNO access and spectrum divestment to the carve out of infrastructure to create a new mobile network operator. In Spain, Digi has reached an agreement to acquire assets from Orange and MasMovil if they are accepted as remedies by the EC that then facilitate the merger. The arrangement includes a transfer of spectrum in the 1.8GHz, 2.1GHz and 3.5GHz bands, and an optional national roaming agreement with Orange, with Digi also set to establish a RAN sharing agreement with Movistar (Telefónica) during its network rollout. In mid-December 2023, the EC restarted the clock on its Phase II review of the Orange/MasMovil deal, and has set a 15 February 2024 deadline by which to make a final decision.
Vodafone offers up spectrum and fibre access in pursuit of Nowo in Portugal
In Portugal, amid reports about an Iliad – or an STC – bid for the indebted Altice, the proposed acquisition by Vodafone of Cabonitel, the parent company of cableco Nowo, could soon result in a decision. The transaction would bolster Vodafone’s position in the market through the absorption of Portugal’s fourth largest converged operator, reducing the number of fixed providers from four to three. In December 2022, ANACOM shared with the Autoridade da Concorrência (AdC), the competition authority and decision maker, its opinion on the deal, considering that it could lead to price increases. To alleviate competition concerns, Vodafone has agreed to transfer to Digi 2x10MHz of spectrum in the 1800MHz band and 2x10MHz in the 3.4-3.8GHz band, while providing wholesale bitstream access to its fibre network. The AdC is currently assessing the remedies package submitted by the parties as part of an in-depth investigation. Its preliminary review (completed in April 2023), confirmed the merger’s potential for both unilateral and coordinated effects, which could have negative impacts for telecoms customers.
No commitments currently on the table in the review of Norlys/Telia in Denmark
A third transaction seeing a detailed probe is that of Norlys/Telia in Denmark, which was announced in April 2023. The proposed deal would see Telia exit the country after almost 30 years, a period that witnessed a failed merger with Telenor, but reflects its strategy to focus on markets where there is scope to secure and sustain leading positions. In parallel, Norlys would acquire a nationwide mobile network to complement its existing fixed infrastructure – with the operator using funds from the sale of a minority interest in its fibre business as it seeks to challenge former incumbent TDC. On 18 December, the Danish Competition Authority (known locally as the KFST) informed the parties that it had decided to launch a Phase II investigation – thereby extending the approval process timeline. No commitments have been offered by the parties and Telia has stated that it and Norlys are in dialogue with the KFST and aim to close the transaction by the end of Q1 2024 at the latest. While a combined Norlys/Telia would strengthen the competition facing TDC, this timeline appears optimistic, with suggestions that the review could drag on into Q2.
