The merger operation between Orange and the MásMóvil Group will completely change the telecommunications landscape in Spain if approved. In addition to giving rise to the company with the largest market share over Movistar, it will produce a series of changes that have yet to be seen. As we already know, the European Union does not see it entirely clearly and has thoroughly studied the operation, being able to impose a series of conditions that may be key. In recent days we have learned that Digi will be the great beneficiary of this merger.
The European Commission is the body in charge of evaluating mergers and purchases that take place in Community territory as long as large-volume companies participate in them. The usual thing is that a decision is made in this regard in 25 days, being in most cases favorable to the operation. This is known as Phase I.
However, when they are “greater” things that are suspected to affect competition, among other things, the operation goes to Phase II in which everything is analyzed in more depth. This is the case of the combination of the businesses of Orange and MásMóvil in Spain. The Commission explained in a statement that it would study “the effects of the proposed transaction to determine whether its initial concerns about competition are confirmed.”
And what does Digi fit into all this?
Well, those fears about competition could lead to imposing conditions on the merger as we already saw in Orange’s purchase of Jazztel. Here it was forced to sell part of the fixed network to another operator, in addition to providing a favorable national roaming agreement for the use of the networks. Grupo MásMóvil went from being an insignificant operator to what it is today by virtue of these remedies.
Now, Digi would be the best positioned operator to benefit from these conditions and keep part of the network or important assets of Orange and MásMóvil. This is clear from the assessment made by Scope Ratings analyst Jacques de Greling who equates the situation to that of Hutchinson and Wind Tree in Italy. Here Iliad benefited, which ended up entering the market of that country.
In the analyst’s opinion, the European Commission “could demand the creation of a fourth mobile operator in Spain, most likely around Digi’s Spanish subsidiary.” He understands that Orange and MásMóvil will have to sell part of their spectrum and network components to the Romanian operator Digi.
For this reason, Digi would gain a lot in this operation by accessing remedies that it would be difficult to obtain otherwise. However, it is not the only company in the sector interested, but it is the one that appears in all the pools to get hold of them.
