FRANKFURT: Telefonica Deutschland said it had agreed a deal with small rival Drillisch as part of its efforts to obtain regulatory clearance for its 8.6 billion euro ($117 billion) takeover of KPN's German business, E-Plus.
The German unit of Spain's Telefonica said on Wednesday it would grant Drillisch access to a fifth of the combined network of Telefonica and E-Plus.
Sources told Reuters last week that EU antitrust regulators would approve Telefonica's bid for E-Plus after the operator promised to grant rivals access to its network. Drillisch is a so-called mobile virtual network operator (MVNO).
These operators rent access on bigger rivals' networks and tend to sell cheaper mobile plans, often without a long-term contract and targeted at youth or ethnic niches.
Striking a deal with MVNOs was one of the main conditions the European Commission had set for approving the deal. The concessions would be broadly similar to those offered by Hong Kong-based Hutchison Whampoa for its acquisition of Telefonica's O2 Ireland unit, which received the regulatory green light last month.
The commission's decision is expected by July 2 and the possibility of the deal going ahead has already created dismay in the German cartel office. Sources said the German regulator had written to European Competition Commissioner Joaquin Almunia and fellow agencies across Europe, warning against the merger.
Telefonica Deutschland shares were up 0.5 percent in early trade.
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