Brussels today announced the launch of an in-depth research for the merger of activities of the companies telecommunications Orange and MasMovil in Spain, a merger that led to the creation of a consortium worth more than 18 billion euros.

THE European Commission justified the initiation of the investigation, citing possible problems regarding competition regulations.

The binding agreement signed by the two companies will reduce the number of telecommunications network providers in Spain from four to three, it said in the Commission’s announcementvoicing fears of a reduction in competition in fixed and mobile broadband services, as well as in multiple play packages.

“This may lead to higher prices and a lower quality of service for consumers,” the Commission underlines.

The Commission also raises concerns that the new group may have the ability to restrict access to mobile virtual network operators, which do not have their own infrastructure, thereby reducing their ability to compete.

French giant Orange and Spanish rival MasMovil, the second and fourth largest operators in the country respectively, announced in July plans to merge their operations in Spain. The move is expected to result in a “50-50” joint venture worth €18.6 billion.

The two groups’ stated aim is to complete the project in the second half of 2023 “at the latest”, subject to competition authorities’ approval.

The agreement was notified on February 13 to the Commission, the EU’s competition watchdog. After the in-depth investigation begins, the Commission has 90 working days (until August 21) to issue its decision.

Orange and MasMovil justified their joint venture by mainly referring to the improvement of efficiency that will allow them to “accelerate investments in optical fiber and 5G”.

This agreement was made in a wider context where numerous heads of European providers have called for market consolidation in the Old Continent to reduce competition and increase their profitability, in a period of massive investment in these technologies.

The launch of the in-depth investigation “is a new stage in the process with the Commission, during which we will have the time and the opportunity to demonstrate that this agreement is beneficial for both Spanish consumers and the telecommunications industry, because it will guarantee the sustainable development of 5G and fiber optics on a larger scale in a very competitive market,” an Orange representative responded in a press release.