Spanish telecoms provider Telefonica SA (TEF.MC) is offering to lease some spectrum to a German competitor in a bid to secure EU antitrust approval for its proposed takeover of KPN's (KPN.AS) E-Plus unit in Germany, the Financial Times reported on Monday.
Telefonica is offering to lease a relatively small amount of higher-frequency spectrum to a competitor in order to create a fourth rival to replace E-Plus, according to a 28-page confidential document seen by the FT. (r.reuters.com/faj58v)
Telefonica's 8.6 billion euro ($11.88 billion) deal for E-Plus has drawn intense regulatory attention as it would reduce the number of mobile operators from four to three in Europe's biggest market, raising the specter of higher prices for consumers.
Telefonica could not immediately be reached to comment on the FT report but on Friday declined to disclose what concessions it offered the EU competition authority. A decision on Telefonica's bid is expected by June 23.
The proposed remedy would be in line with the German telecoms network regulator's request for the company to give up some radio spectrum to safeguard competition.
The Financial Times said Telefonica's proposed remedy extends to up to 50 percent population coverage in urban areas and about 40Mhz of spectrum.
For the rest of the country, Telefonica is also offering a roaming agreement on commercial terms, but with a cap of up to 10 percent of its network, the paper said.
The FT said Telefonica has promised to provide space on its network at wholesale rates for up to three other rivals, known as mobile virtual network operators.
The offer would lapse if no expressions of interest are received by the end of this year, the FT reported.
The Financial Times said Brussels had sent out the concessions being offered by Telefonica to rivals to gauge whether it would be sufficient to keep the German telecoms market competitive.
(Reporting by Karen Rebelo in Bangalore; Editing by Lisa Shumaker)