The European Comission has approved the Orange-MasMovil merger last month

The Council of Ministers of Spain gave the approval for the Orange-MásMóvil merger “with specific commitments and conditions”, including the implementation of an “ambitious industrial plan”.

The approval was announced by the Minister of Digital Transformation and Public Function, José Luis Escrivá, who explained that this merger will involve the creation of an operator with more than 30 million of mobile customers.

Escrivá pointed out that the merger of the two telcos will be accompanied by an “industrial plan” and a very powerful investment policy in the coming years.

However, the minister did not provide details on the conditions of the merger or the commitments made by both operators.

Spanish government approval for a transfer of frequencies was the final clearance required for the Orange-MasMovil merger after the European Commission (EC) ratified the merger last month.

The European body said the approval is conditional upon full compliance with a commitments package offered by Orange and MasMovil.

During its in-depth investigation, the commission said it gathered extensive information and received feedback from market participants and other stakeholders. Following its investigation, the body said it had concerns that the transaction, as initially notified, would restrict competition in the retail markets for the supply of mobile and fixed internet services in Spain, whether offered standalone or in bundles.

However, to address the commission’s competition concerns, Orange and MasMovil committed to divest spectrum held by MasMovil to Spanish MVNO Digi Communications across three frequency spectrum bands, two medium frequency bands (1,800 MHz and 2,100 GHz) and one high frequency band (3.5 GHz). The mobile spectrum to be divested will enable Digi to build its own mobile network.

The two carriers also committed to enter an optional national roaming agreement, which Digi can decide to use or not. The possibility to use the JV’s network will complement Digi’s own network, which Digi will start rolling out with the use of the divested spectrum.

“After collecting the feedback from a wide variety of market participants during a market test of the proposed commitments, the commission concluded that they fully address the identified competition concerns and will preserve a competitive telecom market in Spain, both in terms of price and quality, as well as in terms of 5G network deployment, to the benefit of consumers,” it added.

The JV was initially announced in July 2022. Orange previously said the 50:50 joint venture with MasMovil would have a customer base of more than 7.3 million in the fixed market and 30 million in the mobile sector. The two telcos expect to realize synergies of €450 million (currently $ 492.5 million) per year from the fourth year after closing.

Orange and MasMovil expect to fully complete the transaction by the end of the first quarter of 2024.