Telefonica has offered to sell spectrum and provide roaming to a new operator on the German market in order to secure regulatory approval for its proposed takeover of E-Plus. According to concessions it offered the European Commission, seen by the Financial Times, Telefonica would cede around 40 MHz of higher-frequency spectrum, suitable for covering up to 50 percent of urban areas. This is about a seventh of the frequencies held by the combined Telefonica Deutschland and E-Plus.
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 spectrum would also be leased, rather than given, to the new rival. If no expressions of interest are received by the end of this year, the offer lapses.
The commission has asked rivals to comment on the proposal and whether it would be sufficient to maintain competition in Germany. People involved in the talks expect it to be the opening offer of a difficult negotiation, the paper said. Brussels is pushing for a more attractive package to entice a new operator, including potentially shedding customers and more spectrum.
Alongside the concessions to make way for a fourth operator, Telefonica promised to provide space on its network at wholesale rates for up to three other MVNO. The agreement includes an initial maximum peak capacity of 2 Gbps, about a tenth of Telefonica’s current peak usage, although that would double in three years. In addition, Telefonica has offered to sell 8,000 cell sites initially, with an additional 2,000 sites at a later date, as well as 50 shops to be selected by the group in urban areas.