E-Plus CEO: Regulator may demand remedies in Telefonica tie-up

FRANKFURT Tue Jul 23, 2013 9:07am EDT

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FRANKFURT (Reuters) - E-Plus, the German mobile phone operator, expects regulators may demand remedies in order to approve its sale to Telefonica Deutschland for some 8.1 billion euros ($10.7 billion), its CEO told Reuters.

"It was that way with the merger of Hutchison with Orange in Austria," Thorsten Dirks told Reuters in an interview on Tuesday after KPN announced it was selling E-Plus to Telefonica, which operates the O2 brand.

Because of its size and cross-border implications, the European Commission's antitrust watchdog will closely evaluate the deal's impact on consumers and network quality in Germany.

In recent deals where operators sought to take markets from four to three players, as would be the case here, regulators have demanded concessions such as spectrum divestments and pledges to offer competitive rental terms to rivals.

Dirks said that one aspect that could come under scrutiny was the two companies' combined spectrum.

"If you were to look at the spectrum of a combined E-Plus and O2, you would quickly see that it is relatively large compared to that of competitors," Dirks said.

"It's easy to imagine that the regulators would look closely at this aspect."

(Reporting by Peter Maushagen and Victoria Bryan; Additional reporting by Natalia Drozdiak)

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