TWO of Spain’s biggest telecoms operators Orange and MasMovil have signed a formal deal to merge their operations in the country.

The agreement is worth close to €19 billion and subject to EU approval, it will come into force before the end of the year.

The two companies announced their intention to combine their Spanish services in early March.

The merger produces a major broadband and phone network acting as a big challenge to market leading Movistar/Telefonica.

The other major player in Spain will be Vodafone.

The European Commission will investigate whether the Orange-MasMovil tie-up is in the public interest.

It has previously opposed deals that reduce the number of players from four to three in major markets.

Spain is a four-way fight with Telefonica’s Movistar brand holding a 28.24% share, Orange 22.91%, Vodafone 22.26% and MasMovil with 20.55%, according March figures from competition regulator CNMC.

The Commission’s response will also reveal whether it is willing to favour a market structure with fewer operators and potentially higher investments on infrastructure — as lobbied for by industry — or if it will stick to protecting customers in a market led by strong competition and low prices.

The merged entity would generate more than €7.3 billion in annual revenue and more than €2.2 billion of annual core operating profits, the two companies said.


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