As the song by Europe says: it’s the final countdown, or The final countdown.

Brussels is close to making the final decision that could change the future of telecom operators and has the entire sector on edge.

The European Commission is finalizing the last steps before approving the merger of Orange and MásMóvil, which is expected to be announced between July and September. The question is not so much whether the operation will be approved—something that seems not in doubt—but who will be the company to benefit, as the process is in phase II of evaluation for deeper scrutiny.

As was the case in the Orange and Jazztel merger in 2015, European regulators may take measures to ensure competition, focusing on selling redundant assets after the merger or preventing the joint venture from achieving too dominant a position that could unbalance the market.

These measures, known as remedies, allow companies competing against the three major operators (Telefónica, Vodafone, and Orange) to access assets at a price much lower than market value. In 2015, MásMóvil was chosen, which allowed it to strengthen its position as the fourth operator and tilt the balance in its favor.

Spanish telecoms could gain more mobile network capacity: bad news for aspiring fourth operators but good for the big three.

At the moment, it’s unknown which compensatory measures the European Commission will choose. Depending on their severity, they could benefit either the big operators or the smaller telecoms. However, in recent weeks, there has been a lot of movement from companies presenting their bids for the remedies.

Currently, there are four major candidates to benefit from the assets resulting from the Orange and MásMóvil merger. Here’s a look at who they are and the reasons they present to convince regulators in Brussels.

Although it had already signaled its interest in the remedies, the low-cost operator Finetwork has recently submitted its proposal, which is one of the most aggressive in lobbying for its case.

The company, which started in Villena (Alicante) as a local venture but expanded nationally in 2019, now has over 900,000 customers in Spain. It has presented its plan to double its customer base in 2024, which would bring it close to 2 million customers next year.

“We are the best alternative [for the remedies] because we have a national presence,” stated Óscar Vilda, CEO of Finetwork and former executive at Vodafone and Orange in Spain. The operator hopes its nationwide scale will put it ahead of more regional telecoms.

Among other reasons for Brussels to choose Finetwork as the beneficiary of the safeguards, the company has also highlighted that it has a single system for all its customers and that its contract with its network provider, Vodafone, expires in April 2024, meaning it would be one of the few that would not have to pay a penalty if it switches providers.

“We believe the commission will demand it because the penalty reduces the ability to compete,” Vilda said, referring to companies that have existing network access contracts with a major operator like Telefónica, Orange, or Vodafone.

Digi

Entre los operadores que compiten por los remedies, Digi es la compañía que tiene una posición más fuerte en el mercado.

El operador de origen rumano lleva mes tras mes siendo la teleco que más crece en clientes a costa de los 3 grandes. Solo en mayo consiguió más de 110.200 portabilidades, su mayor incremento del año, lo que le coloca con 4.049.000 clientes de móvil, más de 973.000 de fibra y más de 320.000 de telefonía fija.

Digi ya se ha ofrecido a Bruselas para ser la compradora de los activos procedentes de la fusión de Orange y MásMóvil, como ha publicado Expansión, aunque la empresa no ha confirmado este interés en los remedies a Business Insider España a la espera de conocer las condiciones finales.

La Comisión Europea podría optar por Digi, el operador más grande de los candidatos, en caso de seguir su política de competencia tradicional, que busca crear un cuarto operador en posición de competir con los 3 grandes del sector en España.

“Somos una compañía con una visión de inversión y creación de empleo a largo plazo y en continuo crecimiento gracias a la confianza de nuestros clientes”, valoran fuentes de la empresa.

Avatel

Among the operators competing for the remedies, Digi holds the strongest position in the market.

The Romanian-born operator has been consistently gaining customers from the three major operators month after month. In May alone, it achieved over 110,200 mobile number portabilities, its largest increase this year, bringing its total to 4,049,000 mobile customers, over 973,000 fiber customers, and more than 320,000 fixed-line customers.

Digi has already expressed its interest to Brussels in purchasing the assets from the Orange and MásMóvil merger, as reported by Expansión, although the company has not confirmed this interest in the remedies to Business Insider España, awaiting the final conditions.

The European Commission could choose Digi, the largest of the candidate operators, if it follows its traditional competition policy, which seeks to create a fourth operator capable of competing with the big three in Spain.

“We are a company with a long-term investment and job creation vision, continuously growing thanks to the trust of our customers,” sources from the company noted.

Avatel

Another operator that Orange and MásMóvil have contacted to gauge its intentions in case it receives the remedies, as reported by Expansión, is Avatel.

This operator, founded in Marbella (Málaga) in 2012, claims to be the fifth-largest operator in Spain and the leader in rural areas. In recent years, it has invested over 650 million euros to expand its business.

Avatel believes that its focus on rural areas, as well as its status as an OMV mobile operator since 2021, positions it to be the telecom company that benefits from the remedies.

“The national footprint of Avatel, with sales points throughout the country, complements the potential networks resulting from the Orange and MásMóvil merger, which are more concentrated in large cities. This complement helps maintain competitiveness and the goal of digital development across the entire territory,” said Ignacio Aguirre, CEO of Avatel Telecom.

Additionally, Avatel has been growing through the acquisition of local operators, arguing that it already has experience and that integrating the assets from the Orange and MásMóvil merger would not pose any issues.

“The management team has demonstrated deep expertise in network deployment and providing convergent services to customers. Over the last two years, we’ve shown great ability to adapt and integrate infrastructure, systems, and processes through the acquisition of more than 130 local operators,” added Aguirre.

Adamo

The fourth operator vying for the remedies determined by Brussels is Adamo, another company that Orange and MásMóvil have contacted to learn about its plans.

This operator, which has existed since 2007 and is based in Barcelona, initially focused on deploying FTTH fiber networks in large cities. It later added mobile phone services and high-speed internet in 950,000 rural homes across Spain to its offerings.

Its arguments are similar to those of Avatel, and it will attempt to persuade regulators that its rural expansion complements Orange and MásMóvil’s network assets, which are focused on urban areas.

Adamo has declined to comment on this issue to Business Insider España.”

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