Spain and Germany look at the bigger picture with KPN-Telefónica merger

Juan Fernandez Gonzalez | 25-08-2013

Telefónica’s intention to merge with KPN's German unit E-Plus and América Móvil’s announcement that it has put in place financing to buy the rest of the group (it owns 30% at present) have generated expectation and concern throughout Europe’s telecom market.

The German free competition authority has been the first to step in.
Andreas Mundt, the institution’s president, explained that they are concerned about the high market concentration resultant after the operation. Mundt pointed out that the anti-monopoly office should also analyze the operation, after which Telefónica would become the third telco in the biggest European market, with nearly 30% of mobile comms revenue.

Spain’s Industry Minister, José Manuel Soria, sees a market consolidation in the merge. According to Soria, in Europe there are too many operators (around 80) while in the US, for instance, there are only three big ones. This would make it more difficult to reach the EU's goal of a unified telecom market.

Meanwhile, the operation is moving slowly while E-Plus and Telefónica are waiting for América Móvil's takeover of KPN. The Netherlands-based group has sent the E-Plus documentation to its shareholders, asking for a positive vote during the assembly of 2 October.