German regional mobile operator Airdata has challenged Telefonica Deutschland’s acquisition of rival player E-Plus in the EU General Court.
Airdata claims that the remedies offered by Telefonica to win the European Commission’s approval for the merger were not sufficient to protect competition in Germany. Airdata also claims in a dispute being handled separately by a German court that Telefonica should have returned some of its spectrum to the government.
"The approval of the acquisition is not lawful," argued Airdata CEO Christian Irmler, in a statement on Sunday.
"The commitments made by Telefonica were totally insufficient," he said, allowing Deutsche Telekom, Vodafone and Telefonica Deutschland to dictate prices in the German mobile market.
Brussels approved Telefonica Deutschland’s acquisition of E-Plus in July 2014. The deal, which saw Telefonica pay €5 billion in cash plus a 20.5% stake in the merged entity to E-Plus parent KPN, attracted significant scrutiny since it reduced the number of mobile operators in Germany to three from four.
To address the Commission’s concerns, Telefonica offered to sell up to 30% of the combined company’s spectrum to an MVNO or to a new MNO. The company subsequently agreed to offload 20% of its spectrum to virtual player Drillisch over a five-year period, giving it the option to purchase an extra 10% at a later date.
Telefonica also offered to extend existing wholesale agr eements with its own and E-Plus’ MVNO and service provider partners, and agreed to provide wholesale access to its 4G network.
Airdata on Sunday called the concessions "inadequate."
In addition, Airdata also claimed that spectrum licence conditions stipulate that licence holders must remain independent throughout the full term of their licence. The company argues that Telefonica should have returned some of its frequencies to the government but didn’t.
Allowing Telefonica to keep these frequencies is "unlawful" and "impedes sustainable competition," Airdata argued, adding that a German court – the Cologne Administrative Court – is set to issue a verdict on this particular issue on 10 June.
