The European Commission has approved the acquisition of Jazztel by Orange, subject to the full implementation of a number of commitments by the latter to ensure effective competition on the fixed internet access services markets.
In a statement, the Commission says it had concerns that the takeover could have led to higher prices for fixed internet access services for Spanish consumers. The commitments, which remove these concerns, are that:
On optical fibre: Orange has committed to divest an independent FTTH network covering 700,000 – 800,000 building units, which is similar to the size of Orange’s current FTTH network in Spain. This high speed network covers 13 urban districts located in five of the largest Spanish cities: Madrid, Barcelona, Valencia, Sevilla and Málaga.
On copper: Orange has committed to grant the purchaser of the FTTH network wholesale access to Jazztel’s national ADSL network for up to eight years. This commitment is for an unlimited number of subscribers and will allow the purchaser to compete immediately on 78% of Spanish territory. The cost for this wholesale access to Jazztel’s ADSL network will allow the new player to compete as aggressively as Orange and Jazztel do today.
The vast majority of fixed internet contracts in Spain are bundled with a mobile component so that a new entrant will need access to a mobile network to compete effectively. Orange has also committed to grant to the purchaser of the FTTH network wholesale access to its mobile network including 4G services, unless the purchaser already has access to a mobile network. This will be at conditions that are at least as favourable as those Orange currently grants to Jazztel.
The Commission adds that the remedies taken as a whole ensure that a fourth nationwide operator can enter the Spanish market and be able to compete effectively in markets involving fixed internet access services. They address in full the competition concerns raised by the merger on the markets involving fixed internet access services in Spain.
The Commissioner in charge of competition policy Margrethe Vestager said: “A very important thing before agreeing to Orange’s takeover of Jazztel was to make sure that consumers in Spain would not suffer from higher prices for fixed internet access services. With the remedies in this merger a new player may enter the market and compete as strongly as Orange and Jazztel do today.”
