(MENAFN- The Peninsula) The EU launched an in-depth probe into the ‚¬3.4bn acquisition of Spanish telecom Jazztel by French giant Orange to see if it distorts the market and undercuts customer choice.
The $4.2bn deal would cut the number of telecoms companies in Spain to three from four, the Commission said, warning of a "significant loss of competitive pressure for fixed Internet access services and fixed-mobile multiple play offers," both key markets. "The loss of Jazztel as an important competitive force could lead to price increases for these services for customers in Spain," it added. Orange announced its bid in September, counting on Jazztel's some 1.5 million broadband subscribers to give it an advantage in offering combined high-speed Internet, TV, and fixed-line and mobile telephone packages. "We are doing this deal to accelerate our growth in Spain, particularly in fixed-mobile convergent offers," Orange CEO Stephane Richard said at the time.
Analysts say the acquisition reflects the increasing consolidation of Europe's crowded markets where the major companies are steadily swallowing up their smaller rivals to be able to offer a full range of services.
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