The last hurdle has been cleared and Telefonica, the Spanish telecommunications giant, is now able to complete the purchase of British wireless company 02. The EU has approved the deal, which has a price tag of $31.5 billion. The blessing from EU was contingent on Telefonica’s agreement to pull out of the FreeMove international roaming alliance that it belonged to along with France Telecom, Telecom Italia and Deutsche Telekom. Regulators were concerned that competition for international roaming services would be damaged by the deal. 02 belongs to the StarMap alliance, a much smaller collective.
The concern for regulators was that 02 would be forced either to leave StarMap and join the FreeMove Alliance or more closely align their activities with those of the FreeMove members, which would have the same impact. By voluntarily agreeing to withdrawal, Telefonica has eased those concerns.
This obviously isn’t the last time we will be faced with issues like this as the telecommunications sector continues to consolidate and redefine itself.