The European Commission has launched an investigation into Orange’s proposed takeover of Spain’s Jazztel. France’s Orange already has a Spanish subsidiary, whose connectivity Jazztel resells as a mobile virtual network operator. Jazztel, founded by Fon boss Martin Varsavsky 16 years ago, is more of a fixed-line player, while Orange has both mobile and fixed networks in Spain. The Commission said in a statement that it is worried about the fact that the merger would result in just three nationwide fixed-line communications providers in Spain (the others are Telefónica and Vodafone) and, by reducing competition, allow the ISPs to increase their prices. Orange has proposed commitments to keep things fair, but the Commission doesn’t think they go far enough.
There is little that’s subtle about America’s giant telecom beast, Comcast, and the same can be said about its critics.
The one-time U.K. monopoly carrier BT may be sniffing around O2 and EE as it considers how best to get back into the mobile carrier game, but it seems it’s not the only one. According to a Reuters report, Hong Kong’s Hutchison Whampoa is also considering a bid for one of those companies. Hutch already owns Three, the smallest U.K. mobile network operator, so this would reduce the number of network-owning cellular players in the country down to three (the other being Vodafone). Three and EE already have a network-sharing deal that involves a joint venture called MBNL, so integration would be easier on that front. EE is jointly owned by Germany’s Deutsche Telekom and France’s Orange, and O2 by Spain’s Telefonica.
Telefónica will cut 1,600 jobs in Germany following the merger of O2 Deutschland with E-Plus, to get rid of duplicate roles. The jobs will be phased out by 2018, the firm said Friday, noting that positions would go from both O2 and E-Plus. It also stressed that E-Plus’s Düsseldorf office would retain an important role in the combined operation, alongside Telefónica Deutschland’s Munich headquarters and Hamburg office. Telefónica completed its purchase of E-Plus from Dutch telecoms group KPN at the beginning of October following European Commission approval in late August, in the process becoming Germany’s biggest mobile operator.
Comcast’s top lawyer is taking a more aggressive tone at a time when attention is shifting to the internet implications of its proposed merger with Time Warner Cable.
Vodafone’s share price rose Friday on rumors of a takeover bid by AT&T. We’ve so been here before — AT&T promised back in January that it wouldn’t launch a bid for the subsequent 6 months. China Mobile is also reportedly interested in buying a stake in Vodafone. On top of that, AT&T is also reportedly considering buying Ireland’s Eircom as a way into Europe, and Vodafone itself was rumored to be considering a bid for T-Mobile US, so y’know, it’s probably worth seeing what actually happens before getting too excited. One thing that has happened, though, is that Vodafone just stumped up $96 million to take over Greek fixed-line provider Hellas Online.
Every quarter, T-Mobile refuted Sprint’s basic argument for the merger by performing so well. Mobile industry analyst Chetan Sharma believes the two carriers will get together, but not while T-Mobile is growing so quickly.
With no merger possibilities on the horizon, Sprint and T-Mobile will have to look at a different acquisition target: spectrum. The 2015 incentive auction will be both carriers’ opportunity to get the low-band frequencies they lack.
Sprint and T-Mobile may be forced to bid independently in next year’s spectrum incentive auction only to find themselves part of the same combined carrier shortly thereafter. A bidding joint venture might solve that problem.
No matter how bad an idea a Sprint-T-Mobile merger might be or how much regulatory scrutiny it might face, the two companies some committed to going through with it. They could announce as early as July.