Digi Spain is the benefactor as the European Commission (EC) imposes pre-conditions on its approval of the planned merger between Orange and MásMóvil. It is an equation for market consolidation where four minus one will still equal four.
The EC’s official OK bestows support for Digi’s Spanish business development plan, deeming the alternative challenger “a suitable purchaser” of MásMóvil’s divested spectrum, as Digi is the largest and fastest-growing MVNO in Spain and is thus best-placed to exploit the newly granted spectrum assets.
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The EC points out that Digi also operates its own Spanish fibre network and has MNO experience in the Romanian market – factors that further bolster the likelihood that it will have the capability to act as an effective competitive counterweight to the triumvirate of Telefónica, Vodafone, and the merged Orange/MásMóvil, which will become the country’s largest operator by customer numbers with significant market shares across relevant retail segments.
The EC conferring favour on Digi is further confirmation of the body’s conclusion that the presence of the appropriately armed number four contender will prevent Spanish competition concerns otherwise posed by the JV, including a restriction of MVNO and wholesale fixed network access, and consequent consumer price increases of upward of 10%.
The EC’s required remedial measures are aimed at deterring these sorts of drawbacks and realigning the market to steer it toward more positive outcomes like carrier cost savings and the steady progression of 5G and fibre infrastructure enhancements.
Specified remedies include the divestment of spectrum held by MásMóvil across two medium frequency bands (1,800MHz and 2,100MHz) and one high-frequency band (3.5GHz) to Digi Spain for the express purpose of Digi building its own mobile network and thus assuming the mantle of the country’s fourth MNO. A second remedy has also been imposed to ensure that the new JV offers Digi an optional national roaming agreement that can be used to supplement its newly acquired mobile services presence.
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