EU clears Orange bid for Spain's Jazztel

The European Commission on Tuesday cleared Orange's 3.4-billion-euro acquisition of Spanish telecom Jazztel after the giant French firm agreed steps to ensure the takeover does not hurt competition.

The Commission launched an anti-trust probe into the deal last December on concerns that by cutting the number of telecoms companies in Spain to three from four it would reduce customer choice in the fixed Internet access market.

"In the absence of effective remedies, a merger of these two dynamic players would have significantly reduced competition," the Commission said in a statement.

EU Competition Commissioner Margrethe Vestager said the changes agreed with Orange mean "a new player may enter the market and compete as strongly as Orange and Jazztel do today."

Orange agreed to sell a fibre-optic cable business serving 700,000 to 800,000 homes in five of Spain's largest cities -- Madrid, Barcelona, Valencia, Sevilla and Malaga, the Commission said.

The buyer of these assets will also have access to Orange's ADSL network for eight years, ensuring that they will have a presence in nearly 80 percent of the country.

In addition, Orange agreed to give the buyer access to its mobile network, including 4G services, on the same basis as Jazztel enjoyed.

"The remedies taken as a whole ensure that a fourth nationwide operator can enter the Spanish market and be able to compete effectively in markets involving fixed internet access services," the Commission said.

"They address in full the competition concerns raised by the merger on the markets involving fixed internet access services in Spain."

Orange announced its bid in September, counting on Jazztel's 1.5 million broadband subscribers to give it an advantage in offering combined high-speed Internet, TV, and both fixed-line and mobile telephone packages.

Spain is Orange's second-biggest market, accounting for about 10 percent of the group's revenue.