Digi Nears Merger Approval with Orange and MasMovil

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In a long-anticipated move, telecommunications giants Digi, Orange, and MasMovil have finalized agreements as part of their ongoing merger negotiations. The trio is seeking the European Commission’s approval to resume the halted approval process, which stalled in July.

Recent speculations surrounding a potential deal with Digi have proven accurate, though the disclosed details suggest a slightly smaller scale than initially expected. Digi’s agreement with MasMovil focuses on the transfer of spectrum licenses. Valued at €120 million, it includes 2×10 MHz of 1800 MHz frequencies, 2×10 MHz at 2.1 GHz, and 20 MHz at 3.5 GHz, with an additional conditional component worth €20 million.

Simultaneously, Digi has brokered an option agreement with Orange Spain pertaining to roaming services. Orange has committed to providing Digi with a national roaming service, enabling access to its mobile network across various technologies to enhance coverage.

Both agreements are contingent upon the completion of the merger between Orange and MasMovil, pending European Commission approval. Notably, these deals do not encompass the transfer of mobile network assets, contrary to earlier speculations.

The absence of mobile network asset transfers may impact Digi’s competitive expansion, particularly as it vies to establish itself as the fourth major mobile network operator in the market. Furthermore, there were expectations of fixed network elements being included, a move that could have bolstered Digi’s presence in the broadband sector. However, the latest developments indicate a focus on spectrum licenses and roaming services.

As the regulatory process resumes, the European Commission will scrutinize both the fixed and mobile markets before making a decision on the merger. The Commission is expected to reconvene soon to assess the remedies proposed by Orange, MasMovil, and Digi. With a 50-day window for the Commission to publish its decision, the telecom industry awaits further clarity, anticipating potential shifts in market dynamics well into the coming year.

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