CELEX: 32014M7231
Language: en
Date: 2014-07-02 00:00:00
Title: Commission Decision of 02/07/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7231 - VODAFONE / ONO) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 02/07/2014
C(2014) 4644 final

|PUBLIC VERSION                                    |

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|To the notifying party                                                                              |                                                                       |
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Dear Sir/Madam,

Subject:    Case M.7231 - VODAFONE/ ONO
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

   1. On 23 May 2014, the European Commission received the notification of  a  proposed  concentration  pursuant  to  Article  4  of  the  Merger
      Regulation by which the undertaking Vodafone Group Plc ("Vodafone",  UK)  acquires  within  the  meaning  of  Article  3(1)(b)  of  Council
      Regulation (EC) No. 139/2004 on the control of concentrations between undertakings (the "Merger Regulation") control of the  whole  of  the
      undertaking Grupo Corporativo ONO S.A. ("ONO", Spain), by way of purchase of shares. Vodafone is designated hereinafter as  the  "Notifying
      Party" and Vodafone and ONO as the "Parties" to the proposed transaction.

THE PARTIES

   2. Vodafone is the holding company of a group primarily involved in the operation of mobile telecommunications networks and in  the  provision
      of mobile telecommunications services, such as mobile voice, messaging and data services. Some of  its  operating  companies  also  provide
      fixed voice, fixed internet and/or cable and internet TV ("IPTV") services. Within  the  EU,  Vodafone  is  active  in  12  Member  States,
      including Spain. In Spain, in addition to providing retail  mobile  telecommunications  services  and  mobile  wholesale  access  and  call
      origination services, Vodafone is active in the provision of fixed voice and broadband  internet  access  services,  mainly  by  using  the
      Telefónica (hereinafter the whole group designated as "Telefónica") fixed access network. Furthermore, in May 2013, Vodafone concluded a co-
      investment agreement with Orange for the roll-out of two individual and independent fibre to the home ("FTTH") networks in Spain, with  the
      objective of reaching 3 million building units by 30 September 2015. Vodafone does not offer television services in Spain.

   3. ONO is a Spanish company that is primarily involved in the supply of television and fixed telecommunications  services,  such  as  pay  TV,
      broadband internet and fixed voice services. ONO operates a proprietary cable network in 13 of the 17 Spanish Autonomous  Regions.  ONO  is
      also active as a mobile virtual network operator ("MVNO") hosted in the mobile network of Telefónica.

THE CONCENTRATION

   4. Pursuant to the Sale and Purchase Agreement dated 17 March 2014 between Vodafone and ONO, Vodafone will acquire 100% of the shares  in  ONO
      through its wholly-owned subsidiary Vodafone Holding Europe S.L.U.

   5. Vodafone will thus acquire sole control over ONO within the meaning of Article 3(1)(b) of the Merger Regulation.

   6. The Notifying Party submits that the proposed transaction aims at combining Vodafone's and ONO's complementary mobile and  fixed  networks.
      More specifically, the  integration  of  the  Parties'  networks  will  enable  Vodafone  to  offer  a  full  range  of  fixed  and  mobile
      telecommunications, internet and television services throughout Spain through the integration of ONO's cable network and Vodafone's  mobile
      infrastructure and emerging FTTH network.

   7. In addition, the Notifying Party submits that ONO’s cable infrastructure will drive operational savings through  the  optimisation  of  the
      national and regional backbones as well as IT stacks, the possibility to close central offices,  replacing  asymmetric  digital  subscriber
      line ("ADSL") offers (via local loop unbundling ("LLU")) by ultra-fast broadband in some  areas  and  through  the  usage  of  ONO’s  cable
      infrastructure to complement existing mobile backhaul. Vodafone also expects that the proposed transaction will provide  opportunities  for
      the cross-selling of more services to customers and improved offerings, which would result in enhanced competition and  increased  customer
      choice in Spain.

EU DIMENSION

   8. The undertakings concerned have a combined aggregate worldwide turnover of more than EUR 5 000 million[2] (Vodafone: EUR  51  904  million;
      ONO: EUR 1 598 million). Each of them has an EU-wide turnover in excess of EUR 250 million (Vodafone: EUR […]; ONO: EUR […]), and only ONO,
      but not Vodafone, achieves more than two-thirds of its aggregate EU-wide turnover within one  and  the  same  Member  State.  The  notified
      operation therefore has an EU dimension within the meaning of Article 1(2) of the Merger Regulation.

Relevant Markets

   9. In Spain, the Parties' activities overlap in: (i) the retail supply of fixed internet access services; (ii)  the  retail  supply  of  fixed
      voice services; and (iii) the retail supply of mobile telecommunications services to end customers. The Parties  offer  these  services  as
      stand-alone products, as well as in bundles of these services (so-called "multiple play" offers). In  addition,  Vodafone  and/or  ONO  are
      present upstream in: (i) wholesale access and  call  origination  services  on  mobile  networks  (Vodafone);  (ii)  wholesale  fixed  call
      termination services (Vodafone and ONO); (iii)  wholesale  mobile  call  termination  services  (Vodafone  and  ONO);  and  (iv)  wholesale
      international roaming services (Vodafone).

1 Retail supply of fixed internet access services

  10. Internet access services consist of the provision of a fixed  telecommunications  link  enabling  customers  to  access  the  internet  via
      narrowband ("dial-up") services or broadband services.

1 Product market definition

  11. The Notifying Party submits that there is a single market for the provision of fixed internet access services. According to  the  Notifying
      Party, there is no reason to differentiate between broadband and narrowband, since narrowband nowadays represents a  negligible  proportion
      of retail internet access services in most Member States, notably in Spain.

  12. In addition, the Notifying Party takes the view that the different fixed broadband technologies, such as DSL, cable and fibre, are all part
      of the same product market. The Notifying Party submits that competition authorities have not traditionally defined  separate  markets  for
      the retail supply of fixed internet access services by reference to different bandwidth speeds. The  Notifying  Party  argues  that  market
      players gradually increase the speed of their commercial offerings as technology allows it and the demand  preferences  evolve.  Thus,  the
      lower speeds tend to disappear as the operators increase the speed of their commercial proposals.[3]

  13. In contrast, it submits that mobile broadband is still subject to inherent technical constraints and that retail customers do not  view  it
      as substitutable with fixed broadband. The Notifying Party does not have a strong view as to the possible segmentation between  residential
      / small business customers, and large business customers.

  14. In Carphone Warehouse/Tiscali UK, the  Commission  distinguished  between  residential  /  small  business  customers  and  large  business
      customers.[4] The majority of respondents to the market investigation in the present case  confirmed  that  residential  /  small  business
      customers and large business customers constitute separate markets.[5]

  15. Moreover, also in the Carphone Warehouse/Tiscali UK case, the Commission concluded that narrowband and broadband internet  services  belong
      to separate markets.[6] Broadband internet access has three distinguishing features which are not available with narrowband access: (i) the
      service is always on (that is no dial-up is required); (ii) it is possible to use both voice and data services  simultaneously;  and  (iii)
      broadband has a faster speed than a dial-up connection. In the same decision, the Commission considered  that  broadband  provided  through
      ADSL technology and cable may belong to the same market but left the precise market definition open.

  16. A single competitor indicated that in Spain a distinction between broadband and ultrafast  broadband  should  also  be  considered.[7]  The
      Commission considers that there is a variety of  different  broadband  speeds  in  the  market  and  that  broadband  speeds  increase,  as
      technologies develop. The Commission notes that the increase in speeds is a sign of evolution of the market, rather than the creation of  a
      new separate market.

  17. Furthermore, also in the Carphone Warehouse/Tiscali UK case, the Commission concluded that mobile broadband is more expensive  and  slower,
      so it may constitute a separate market.[8] The majority of respondents to the market investigation in  the  present  case  considered  that
      mobile broadband and fixed internet services are not yet substitutable. Some respondents pointed to differences in speed and quality of the
      services. Others considered that fixed services have much higher performances, although the tendency in the future is that the  differences
      would narrow. In addition, some respondents considered that there are cultural differences  between  fixed  and  mobile  broadband.  Mobile
      broadband is used more by younger users whereas fixed internet services  are  more  widely  used  and  universal.[9]  On  this  basis,  the
      Commission concludes that to date, mobile broadband services are not yet substitutable to fixed internet services in  Spain.  However,  the
      Commission considers it possible that in the future the two services may converge.

  18. For the purpose of the present decision, the exact product market definition in relation to a sub-segmentation of fixed  internet  services
      (for example by customer, technology or speed) can be left open as the proposed transaction does not raise competition concerns  under  any
      possible market definition.

2 Geographic market definition

  19. The Notifying Party considers the market to be national in scope, based on the Commission's precedents.[10]  The  Notifying  Party  submits
      that aside from regional cable operators (such as Euskatel, S.A. , Telecable de Asturias,  S.A.U.  and  R  Cable,  S.A.),  all  competitors
      (including Telefónica, Orange, Jazztel) operate on the national market. Marketing, commercial and technical services, pricing and  bundling
      of services are directed to the national market. The Notifying Party  argues  that  retail  electronic  telecommunications  markets  (which
      include the fixed internet access market) have been consistently defined as national markets. In Spain most operators compete on a national
      basis. The Notifying Party concedes that there are a few relevant regional and local operators but even those  operators  may  be  able  to
      compete on a national basis either by deploying their own networks or by using the regulated wholesale services available in Spain.

  20. The majority of respondents to the market investigation in the present case confirmed that the market for the  provision  of  retail  fixed
      internet services is national in scope and that even telecommunications operators that are part of a wider international group compete on a
      national basis within the Member States where they are active. The competitive conditions existing in each Member State are very different.
      Factors such as the number of competitors, disposable income, the degree of competition, costs, population and  topography  are  listed  as
      differentiating parameters by respondents.[11]

  21. As concerns operators such as ONO that provide telecommunications services via a cable network that is restricted to a  certain  area,  the
      Commission cannot judge in the present case whether they have the ability and  incentive  to  deploy  new  networks  or  obtain  access  to
      telecommunications services outside of their current network footprint. However, they do interact within that footprint with providers such
      as Telefónica that operate nationally. ONO itself already operates a cable network in 13 of  the  17  Spanish  Autonomous  Regions.  Hence,
      especially a cable operator as ONO ultimately competes on the basis of nation-wide dynamics.

  22. For all these reasons, the Commission concludes that the respective market is national in scope.

2 Retail supply of fixed voice services

  23. On the market for retail supply of fixed voice services, operators provide fixed voice services to end-customers.  In  line  with  previous
      Commission decisions, fixed voice services include the provision of connection services or access at a fixed location  or  address  to  the
      public telephone network for the purpose of making and receiving calls and related services.[12]

1 Product market definition

  24. The Notifying Party submits that there is a single market for the provision of fixed voice services.  According  to  the  Notifying  Party,
      there is no reason to differentiate between business and residential customers, since most operators provide  services  to  both  types  of
      customers and residential packages are also purchased by small offices / home offices businesses (SOHOs) and small and  medium  enterprises
      (SMEs). In addition, the Notifying Party takes the view that the relevant market should comprise both domestic and international calls,  as
      well as both fixed line telephony and managed VoIP services. In contrast, the Notifying Party submits that fixed  voice  services  are  not
      substitutable with mobile voice services, even though some consumers may switch from fixed only packages or mobile only voice  packages  to
      fixed and mobile multiple play bundles.

  25. In Carphone Warehouse/Tiscali UK, the Commission considered that a distinction between local / national and international calls as well  as
      between residential and business customers may not be relevant.[13] In Vodafone/Kabel Deutschland, the Commission did not take a definitive
      view with regard to these possible further segmentations of the retail fixed voice services market. The Commission concluded  however  that
      traditional fixed voice services and managed VoIP services are interchangeable within a single market for the retail supply of fixed  voice
      services.[14]

  26. The market investigation in the present case revealed indications that VoIP services and fixed voice services provided through fixed  lines
      are interchangeable (the service is largely the same and the quality of managed VoIP service is improving) and therefore part of  the  same
      market.[15] According to a respondent, the development of VoIP applications over the last years has  increased  the  comparability  between
      both types of services.

  27. As regards the distinction between residential and business customers, the majority of respondents to the  market  investigation  indicated
      that there is a distinction between residential and business customers.[16] One respondent considered that they are two  well-distinguished
      markets and segments with clearly different needs. The degree of competition is different and so is the manner of supplying the service.

  28. For the purpose of the present decision, the exact product market definition can be left open as the proposed transaction  does  not  raise
      competition concerns under any possible market definition.

2 Geographic market definition

  29. The Notifying Party considers the market to be national in scope, based on the Commission's precedents.[17]

  30. The majority of respondents to the market investigation in the present case confirmed that the market for the  provision  of  retail  fixed
      voice services is national in scope and that even telecommunications operators that are part of a wider international group  compete  on  a
      national basis within the Member States where they are active. The competitive conditions existing in each Member State are very different.
      Factors such as the number of competitors, disposable income, the degree of competition, costs, population and  topography  are  listed  as
      differentiating parameters by respondents.[18]

  31. The Commission considers the respective market to be national in scope.

3 Retail supply of mobile telecommunications services

  32. Mobile telecommunications services to end customers include services for national and international voice calls,[19] SMS (including MMS and
      other messages), mobile internet data services and retail international roaming services.[20]

1 Product market definition

  33. The Notifying Party submits that there is a single market for the  provision  of  mobile  telecommunications  services  to  end  customers.
      According to the Notifying Party, it is not appropriate to distinguish services by network technology  (2G/GSM,  3G/UMTS  and  4G/LTE),  by
      tariff (pre-paid and post-paid contracts), by type of customers (private and business), or by type  of  service  (internet  data  services,
      voice and text services).

  34. In Hutchison 3G Austria/Orange Austria the Commission considered the aforementioned segmentations, but eventually concluded that there is a
      single market for the provision of mobile telecommunications services to end customers.[21] More recently, in H3G / Telefónica Ireland, the
      Commission also concluded that there is a single market for the provision of mobile telecommunications services to end customers  and  that
      there are no separate markets by types of customers (such as business and residential), by technology (such as 2G, 3G and 4G), by types  of
      service (i.e. voice, mobile broadband and machine to machine), by types of contracts (such as pre-paid and post-paid).[22]

  35. The market investigation in the present case indicated that the provision of retail  mobile  telecommunications  services  to  private  and
      business customers belongs to the same market. One respondent argued that although there is a difference in consumption and contracts,  the
      range of services offered is largely the same.[23]

  36. The responses of competitors as regards the other possible segmentations of  this  market  were  inconclusive.  However,  the  majority  of
      customers and consumer associations considered that the market should not be segmented by contract type or by type of service.[24]

  37. The Commission also considers that although different types of mobile services and different types of customers / contracts have  different
      characteristics, they form part of the same market because of supply-side substitutability.  MNOs  offering  only  post-paid  services  for
      instance could easily offer pre-paid services and vice versa. Similarly, although consumers may distinguish between mobile broadband, which
      they purchase for use on their laptop or tablet, and bundles of voice and data services, which they purchase for their  mobile  phone,  the
      Commission finds that they form part of the same market based on supply-side substitutability. Mobile broadband is offered through the same
      infrastructure and technology as other mobile telecommunications services. Hence, MNOs could easily switch from offering  mobile  broadband
      to offering other mobile telecommunications services, and vice versa.

  38. For the purpose of the present decision, the Commission concludes that the market for the provision of mobile  telecommunications  services
      to end customers constitutes one single market.

2 Geographic market definition

  39. The Notifying Party considers that the market should be considered national in scope in line with previous Commission's decisions.[25]

  40. The Commission has consistently found that the markets for retail mobile services provided to end consumers are national in scope.[26]

  41. The majority of respondents to the market investigation in the present case confirmed that the market for the provision  of  retail  mobile
      telecommunications services is national in scope and even telecommunications operators that are part of a wider international group compete
      on a national basis within the Member States where they are active. The competitive conditions existing  in  each  Member  State  are  very
      different. Factors such as the number of competitors, disposable income, the degree of competition, costs, population  and  topography  are
      listed as differentiating parameters by respondents.[27]

  42. The Commission considers the respective market to be national in scope.

4 Multiple play packages

  43. In Vodafone/Kabel Deutschland[28], the Commission found that multiple play offers comprise a  bundle  of  two  or  more  of  the  following
      services to end-customers: fixed telephony, fixed internet services, mobile telephony, mobile  internet  and  TV  services.  Such  packaged
      offers may consist of double, triple, quadruple or even quintuple play offers comprising some or all of the above services.

  44. The traditional multiple play offers in Spain have been composed of fixed telephony and broadband access and, to a certain extent, pay TV.

1 Product market definition

  45. The Notifying Party refers to reports from the Spanish competition authority on the evolution in the number of subscribers of the different
      bundles in Spain. These reports suggest that bundles including  mobile  telephony  and  mobile  internet  access  services  have  increased
      significantly in terms of number of subscribers following their introduction in 2012, while  bundles  not  including  these  services  have
      decreased. However, in the Notifying Party's view, customers who subscribe to bundles still account for a relatively low percentage of  all
      customers of fixed and mobile telecommunications services.

  46. The Notifying Party submits that the question whether the different types of multiple play offers constitute separate product markets  from
      each of the markets of their components should be left open, in line with the approach taken in previous Commission decisions.[29]

  47. Previous Commission decisions ultimately left open whether there is a market for multiple play services that is separate from  the  markets
      for each of the components of the bundles.[30]

  48. The market investigation in the present case has indicated that in Spain triple and quadruple-play services  are  becoming  the  norm.  One
      respondent considered that multiple play packages attract the "most valuable customers".[31] In particular,  customers  currently  purchase
      triple and quadruple-play offers combining either (i) fixed telephony, fixed internet / broadband access and TV (only to a limited  extent)
      or (ii) mobile, fixed telephony, fixed internet / broadband access.[32] As part of these multiple play offers, consumer  associations  were
      of the view that today broadband internet access is to be considered the most relevant service.[33] Finally, the  majority  of  competitors
      indicated that they currently market quadruple play offers and confirmed  that  such  offers  are  already  purchased  today  and  will  be
      increasingly purchased in the near future.[34]

  49. In any event, for the purpose of the present decision, the question whether the  different  types  of  multiple  play  constitute  separate
      relevant markets from each of the markets of their components can be left open, as the proposed  transaction  does  not  raise  competition
      concerns under either product market definition.

2 Geographic market definition

  50. In previous decisions, the Commission considered that the possible market for triple play services was national in scope[35] but ultimately
      left the exact geographic market definition open.[36]

  51. As regards the geographic scope of the respective services to be bundled in multiple play offers, in  the  case  at  hand,  the  Commission
      considered the markets for fixed voice, fixed internet access  and  mobile  telecommunications  services  to  be  national  in  scope.  The
      Commission ultimately left open whether the retail market for TV services is national or regional in scope.[37]

  52. For the purpose of the present decision, the exact geographic market definition can be left open as the proposed transaction does not raise
      competition concerns under any possible market definition.

5 Wholesale market for access and call origination services on mobile networks

  53. MNOs provide wholesale access and origination services which enable operators without their own network, MVNOs, to provide their own retail
      mobile services. There is a wide variety of MVNOs, ranging from MVNOs that have a fully  operational  proprietary  core  network  and  that
      purchase access to the radio access network of MNOs on the one end, to pure re-sellers of a MNO on the other end.

1 Product market definition

  54. In line with previous Commission decisions, the Notifying Party submits that wholesale access and call origination services, by which  MNOs
      enable MVNOs to provide their own retail mobile services, belong to the same relevant product market.[38]

  55. The majority of respondents to the market investigation in the present case confirmed this product market definition.

  56. The Commission considers that the product market should be defined as the wholesale market for mobile access and call origination services.

2 Geographic market definition

  57. In line with previous Commission's decisions, the Notifying Party submits that the relevant geographic scope of the  market  for  wholesale
      access and call origination on public telephone network is national[39].

  58. The majority of respondents to the market investigation in the present case confirmed that the geographic market is national.

  59. The Commission considers that the relevant geographic market is national.

6 Wholesale market for fixed call termination services

  60. Call termination is the service provided by a network operator on the supply side to other network operators on the demand side, whereby  a
      call originating in a demand side operator's network is delivered to a user in the supply side operator's network. This service is required
      by every originating operator, as it is necessary for its customers to be able to communicate with the customers of  other  networks.  Call
      termination is therefore a wholesale service that is resold or used as an input for the provision of downstream retail telephony services.

1     Product market definition

  61. In line with previous Commission decisions, the Notifying Party submits  that  wholesale  termination  on  each  individual  fixed  network
      constitutes a separate relevant product market as a customer on any given network can only be reached  by  terminating  the  call  on  that
      specific network.[40]

  62. The majority of respondents to the market investigation in the present case confirmed this product market definition.[41]

  63. The Commission considers that there is no substitute for call termination on each individual network since the  operator  transmitting  the
      outgoing call can reach the intended recipient only through the operator of the network to which the recipient is connected.

  64. The Commission considers that, as regards wholesale call termination services, termination on each individual fixed network  constitutes  a
      separate product market.

2     Geographic market definition

  65. The Notifying Party considers that the market for call termination services is national in scope.

  66. In previous decisions, the Commission considered the geographic market to be national in scope. [42]

  67. The majority of respondents to the market investigation in the present case confirmed the geographic market as national.[43]

  68. The Commission concludes that the wholesale market for fixed call termination services is national in scope.

7 Wholesale market for mobile call termination services

  69. When someone calls a mobile phone connected to a different network that call is terminated on the network of the receiving mobile phone. In
      order for a retail mobile service provider to be able to provide calls to a different network,  it  must  purchase  wholesale  terminations
      services on these other networks. This is done through interconnection agreements between the various network operators.

1 Product market definition

  70. The Notifying Party submits that there is no substitute for call termination on each individual network since the operator transmitting the
      outgoing call can reach the intended recipient only through the network to which the recipient is connected. Accordingly and in  line  with
      previous Commission decisions, the Notifying Party submits that wholesale termination on  each  individual  mobile  network  constitutes  a
      separate relevant product market.[44]

  71. The majority of respondents to the market investigation in the present case confirmed this product market definition.[45]

  72. The Commission considers that there is no substitute for call termination on each individual network since the  operator  transmitting  the
      outgoing call can reach the intended recipient only through the operator of the network to which the recipient is connected.

  73. The Commission concludes, in line with previous decisions, that termination on  each  individual  mobile  network  constitutes  a  separate
      product market.

2 Geographic market definition

  74. In line with previous Commission decisions,[46] the Notifying Party submits that the market should be considered national in scope.

  75. The majority of respondents to the market investigation in the present case confirmed the geographic market as national.

  76. The Commission concludes that the markets for call termination of mobile calls are national.[47]

8 Wholesale market for international roaming

  77. For a provider of retail mobile services to be able to provide its  end  customers  with  telecommunication  services  outside  their  home
      countries, it enters into wholesale roaming agreements with providers of wholesale international roaming on other national markets. Roaming
      consists of both terminating calls and originating calls.

  78. Retail mobile service providers sometimes have preferred roaming partners in certain countries. This means  that  the  preferred  partners'
      network will be used in the first instance when it has coverage and the mobile user has not manually chosen a  different  network.  A  home
      network will normally have multiple agreements with operators in a particular county in order to provide optimal coverage.

1     Product market definition

  79. In line with previous Commission decisions, the Notifying Party submits that there is a relevant product market for wholesale international
      roaming services.[48]

  80. Wholesale international roaming services are regulated.[49] Mobile network operators  must  meet  all  reasonable  requests  for  wholesale
      roaming access under a reference offer and wholesale changes for the making of regulated roaming services (voice, message and data roaming)
      are capped.

  81. The Commission concludes, in line with previous decisions, that the market for international roaming comprising both terminating calls  and
      originating calls constitutes a separate product market.

2     Geographic market definition

  82. The Notifying Party agrees with previous Commission decisions that the relevant geographic scope of the market for the supply of  wholesale
      international roaming is national.[50]

  83. In previous decisions, the Commission found that the wholesale market for international roaming is national in scope, given that  wholesale
      international agreements can be concluded only with companies which have an operating licence in the relevant country and the  licences  to
      provide mobile services are restricted to a national territory.[51]

  84. The Commission concludes that the markets for international roaming are national.

Competitive Assessment

  85. According to the information submitted by the Notifying Party, the proposed transaction gives rise to horizontally affected markets[52] for
      (i) the retail supply of fixed internet access services in Spain; and (ii) the retail supply of mobile telecommunications services  to  end
      customers in Spain. In addition, the Parties' combined market share is close to 20% in the market for the  retail  supply  of  fixed  voice
      services in Spain in the narrower residential segment in 2013 and was above 20% in 2012. On this basis, this market is also being examined,
      although it is technically not an affected market.

  86. In addition, the proposed transaction gives rise to the following vertically-affected markets in Spain: (i) the wholesale market for access
      and call origination services on mobile networks (upstream) and the retail market for the  supply  of  mobile  telecommunications  services
      (downstream); (ii) the wholesale market for mobile call termination services (upstream) and the retail markets for the supply of fixed call
      services and the supply of mobile telecommunications services (downstream); (iii) the wholesale market for mobile call termination services
      (upstream) and the retail markets for the supply of fixed call services and the supply of mobile telecommunications (downstream).

  87. Finally, since both Parties offer multiple play packages in Spain, the proposed transaction  could  potentially  give  rise  to  horizontal
      competition concerns in a possible market for multiple play services.  In addition, the proposed transaction could potentially give rise to
      conglomerate concerns, in relation to foreclosure of inputs (such as mobile or fixed wholesale access services) to competitors  wishing  to
      offer multiple play bundles.

1 Horizontal assessment

1 Retail supply of fixed internet access services

  88. Both Parties provide fixed internet access services to end customers in Spain. The Parties  have  a  combined  market  share  of  20.6%  by
      revenues (Vodafone 5.4%, ONO 15.2%) and of 20.7% by volume[53] (Vodafone 7.9%, ONO 12.7%).[54] On the potential sub-segment relating to the
      provision of fixed internet services to residential customers, the Parties' combined market share is [20-30]%  by  revenues  (Vodafone  [5-
      10]%, ONO [10-20]%) and 22.6% by volume (Vodafone 7.9%, ONO 14.7%).[55] By contrast, on the potential sub-segment relating to the provision
      of fixed internet services to business customers, the Parties' combined market share is below 20% both by revenues and by volume.[56]

1 The Notifying Party's views

  89. The Notifying Party submits that the proposed transaction will not lead to competition concerns on the  retail  supply  of  fixed  internet
      access services market in Spain.

  90. First, the Notifying Party claims that the Parties' combined market share remains below 25%, which is the threshold under which,  according
      to the Commission's Guidelines on the assessment of horizontal  mergers  (the  "Horizontal  Merger  Guidelines"),[57]  a  concentration  is
      generally presumed to be compatible with the internal market.

  91. Second, the Notifying Party claims that the merged entity will continue to face strong  competition  from  other  market  players  such  as
      Telefónica (43.1% market share by revenues), Jazztel (13.8%) and Orange (13.7%).[58] The Spanish market for  the  retail  supply  of  fixed
      internet services is characterised by strong competition both in terms of price (with customer loyalty being very low,  as  shown  by  high
      churn rates) and for the improvement and deployment of next generation network ("NGN") infrastructure in order to meet consumer demand  for
      high transmission bandwidth.

  92. Third, the Notifying Party claims that Vodafone and ONO are not close competitors in this market. ONO is  primarily  a  provider  of  fixed
      telecommunication and pay TV services through its proprietary fixed network. By contrast, Vodafone is an MNO which, despite having recently
      started to deploy its FTTH network, is currently dependent to a large extent on regulated access to Telefónica's fixed network in order  to
      provide fixed telecommunication services.

2 The Commission's assessment

  93. Based on the results of the market investigation, the Commission did not identify competition concerns in relation to the market for retail
      supply of fixed internet services in Spain.

  94. The majority of respondents to the market investigation consider both Vodafone and ONO to be important competitors in the retail supply  of
      fixed internet access services,[59] along with other main providers, namely Telefónica,  Orange  and  Jazztel.[60]  Most  respondents  view
      Vodafone and ONO as close competitors on this  market.[61]  However,  some  respondents  pointed  out  that  the  Parties'  activities  are
      complementary in that, while ONO's main strength lies in its fixed internet network, Vodafone is currently seen first of all as a  provider
      of mobile services.[62] While most of the respondents did not regard either Vodafone or ONO as a particularly innovative  player,  many  of
      them viewed both of them as rather aggressive in terms of pricing, especially due to their attractive multiple  play  offers  that  include
      fixed internet services.[63] The majority of respondents considered entry on the market for the retail supply of fixed internet services to
      be difficult, mainly due to the need for the appropriate infrastructure.[64]

  95. On the other hand, four main providers and a number of smaller competitors will remain active in the market post-merger.  According to  the
      respondents to the market investigation, the remaining competitors would be sufficient to preserve competition in the market.[65]

  96. The Commission notes, first, that, within any possible product market segment, the Parties' combined market share will  remain  below  25%,
      which, according to the Horizontal Merger Guidelines,[66] constitutes a first indication that the proposed transaction  is  not  liable  to
      impede effective competition.

  97. Second, following the proposed transaction, a sufficient number of strong alternative providers will remain active on the market  and  will
      continue to exercise significant competitive pressure on the merged entity. These providers  include  the  incumbent  operator,  Telefónica
      (43.1% market share), Jazztel (13.8%) and Orange (13.7%), as well as smaller competitors.

  98. Third, following the proposed transaction, the merged entity will remain the second largest player, that is, will continue to hold the same
      market position as the one held previously by ONO.  The merged entity will continue to be far behind Telefónica in terms  of  market  share
      and will still face competition from the other providers.  In addition, the Commission notes the dynamic  nature  of  competition  in  this
      market, due to the planned network roll-outs in Spain.

  99. A limited number of respondents raised the concern that, post-merger, Vodafone's position on the market for retail supply of fixed internet
      access services, in particular in relation to a possible segment for high-speed broadband internet  services  (above  30  Mbps),  would  be
      significantly strengthened, reaching in  some  Autonomous  Regions  between  [60-70]%  and  [80-90]%  share  of  the  high-speed  broadband
      segment.[67]

 100. First, the Commission takes the view, based on the results of the market investigation, that there are no  indications  that  the  national
      market for retail supply of fixed internet access services should be further segmented by bandwidth speeds.

 101. Even if such a high-speed broadband internet segment (above 30 Mbps) were to be considered in Spain, the Commission notes that Vodafone has
      only recently started offering high-speed access through regulated access to VDSL2 technology.  Vodafone's share  in  this  segment  ranges
      between [0-5]% and [5-10]%, depending on the region.[68]

 102. In addition, competition in this segment is highly dynamic as almost all competitors in this market are currently developing their existing
      networks by rolling out next generation access services. (See below paragraphs 108 and 109.) It is  difficult  to  predict  how  Vodafone's
      market share and market position will develop in the next years as against the position of its competitors.

 103. Furthermore, in all Spanish Autonomous Communities where the merged entity will be present, it will continue to face  competitive  pressure
      from Telefónica.  Apart for Telefónica, at least one of the other competitors, such as Orange or Jazztel or  the  regional  fixed  services
      providers will also be present in each region offering high-speed broadband. In other words, there is no Spanish Autonomous Community where
      the merged entity would be the only choice for customers to have access to high-speed services.

 104. The Commission also notes that in highly populated areas such as Madrid or Barcelona, where the FTTH installed  accesses  outnumber  hybrid
      coaxial cable ("HFC") accesses according to the Comisión Nacional de los Mercados y la Competencia  ("CNMC"),  ONO's  network  coverage  is
      relatively low. These are the cities where Telefónica's market share is growing more.[69]

 105. In addition, penetration of high-speed lines is still evolving in Spain. According to the CNMC Fourth Quarter 2013 Report, only around  15%
      of the lines as at 31st December 2013 had a speed above 20 Mbps. Therefore, the current situation in terms of broadband speeds  is  rapidly
      changing.

 106. In May 2013, Vodafone concluded a co-investment agreement with Orange for the roll-out of two individual and independent FTTH  networks  in
      Spain, with the objective of reaching 3 million building units by 30 September 2015 (1.5 million units for each of  Vodafone  and  Orange).
      Vodafone and Orange will  deploy  their  FTTH  networks  in  complementary  areas  and  will  facilitate  mutual  access  to  each  other's
      infrastructure.[70]

 107. According to the Notifying Party, even though the proposed transaction has prompted Vodafone to re-negotiate certain  changes  in  its  co-
      investment agreement with Orange,[71] it will not significantly reduce Vodafone's incentive to  continue  deploying  FTTH  in  Spain  (also
      within the co-investment agreement with Orange) or improving the HFC network of  ONO,  also  in  order  to  compete  with  Telefónica  (who
      announced that its FTTH deployment will reach 10 million units during 2014).

 108. First, the Commission notes that there is intensive network competition in the deployment of NGN infrastructure to meet consumer demand for
      high transmission bandwidth in Spain. While cable operators such as ONO upgraded their networks  a  few  years  ago,  other  operators  are
      currently undertaking a massive deployment of FTTH networks. These include Telefónica, [72] which, as mentioned above, announced  that  its
      FTTH deployment will reach 10 million units during 2014 and 13 million in 2016.[73] Telefónica expects to reach 80% of  Spain's  population
      in 2016. Thus, Telefónica will have more FTTH accesses than ONO's cable network accesses at the end of this year and, therefore,  a  better
      geographical coverage. In addition, Telefónica is upgrading its ADSL customers to its FTTH networks without a price  increase  and  at  the
      same time adding to the commercial proposal pay TV services without a price increase.

 109. Furthermore, other operators such as Jazztel are deploying FTTH networks so the degree of competition in high-speed networks  in  Spain  is
      very intense. Jazztel, pursuant to a co-deployment agreement with Telefónica, has started deploying FTTH with  the  objective  of  reaching
      around 4.5 million households by 2015.[74]

 110. Second, the CNMC appreciates that operators are offering higher transmission bandwidth with lower effective prices (according to  the  CNMC
      Geographical Report real prices for transmission above 30 Mbps have decreased between 5% - 10% in 2013 as compared to 2012).[75] Also,  the
      CNMC considers that the improvement of VDSL2 access and the deployment of FTTH will increase the number of operators offering  speed  above
      30 Mbps.

 111. Without prejudice of regulated access to Telefónica's network,[76] post-merger there will be therefore at least  four  operators  deploying
      NGN at national level (Telefónica, Vodafone, Orange and Jazztel) and three more at regional level (Euskaltel, Telecable and R  Cable),  all
      in the context of demand growth of NGN fixed broadband access.

 112. Third, as explained above, ONO's network in highly populated areas such as Madrid and Barcelona is  not  as  developed  as  that  of  other
      competitors. Vodafone will thus have an interest to continue the deployment of FTTH in such cities.

 113. Given the level of network competition in Spain and on the basis of a  balanced  assessment  of  the  available  evidence,  the  Commission
      considers that the proposed transaction is unlikely to significantly affect Vodafone's incentives to continue the deployment of FTTH  under
      the agreement with Orange.  In any event, Orange could turn to other fixed operators for co-investment agreements or could invest  in  FTTH
      on its own.

 114. For these reasons, and taking into account the future FTTH deployments of various competitors as set out above,  the  Commission  considers
      that it is unlikely that the proposed transaction will give rise to competition concerns on a possible  segment  for  high-speed  broadband
      internet in Spain.

 115. In light of the above, the Commission concludes that the proposed transaction would not significantly impede effective competition  on  the
      Spanish retail market for fixed internet services, including its possible segments.

2 Retail supply of fixed voice services

 116. The Parties' combined market share is 14.8% by revenues (Vodafone 4.8%, ONO 10.0%) and 19.0% (Vodafone 8.0%, ONO 10.6%)[77] by  volume.[78]
      On the narrower segment of the provision of fixed voice services to residential customers, the revenue share of  the  merged  entity  would
      amount to [10-20]%,[79] with an increment of less than [5-10]%.[80] Although the combined market share on this segment  share  remains  […]
      below 20%, the Commission has included it in its investigation.

1 The Notifying Party's views

 117. The Notifying Party submits that the merged entity will continue to face strong competition in  particular  from  Telefónica  (by  far  the
      market leader with 71.7% by revenues), Jazztel (4.4%) and Orange  (2.5%).[81]  It  also  submits  that  Vodafone  and  ONO  are  not  close
      competitors in this market; competitors have spare capacity to provide fixed telephony services in case of an increase in price  and  there
      are clear asymmetries between Telefónica, Vodafone and other competitors.

2 The Commission's assessment

 118. The responses to the market investigation indicated that the Parties are considered important and close  competitors.[82]  The  respondents
      refer to ONO's market shares which establish ONO as a number two competitor on this market. One respondent refers to Vodafone's ability  to
      combine fixed and mobile voice minutes with cheap rates in terms of multiple play services. (The impact on  competition  in  multiple  play
      services is considered below).

 119. However, the majority of respondents argued that Vodafone is neither an innovative nor a particularly aggressive  competitor.[83]  Vodafone
      is mainly seen as a mobile telecommunications services provider, with limited strength in the fixed voice  services  market.  In  addition,
      there are other strong providers in the market, including Telefónica and a sufficient number of alternative  providers  will  remain  post-
      merger on this market. Others argue that Vodafone has been aggressive in the past but has not remained so in the last 3-4  years.  On  this
      basis, the market investigation was inconclusive in regard to Vodafone's importance in the market and its closeness in relation to ONO.

 120. The Commission did not identify competition concerns in relation to the market for the retail supply of fixed voice  services.  First,  the
      Commission notes that the Parties' combined market share remains at 14.8% (by revenues) in the overall market  for  the  retail  supply  of
      fixed voice services and under 20% even on the narrowest possible market segment, which is the residential segment.

 121. Second, a number of alternative providers will remain active on the market,  including  the  incumbent  operator  Telefónica,  Jazztel  and
      Orange.  In the overall market for the retail supply of fixed voice services, Telefónica is the undisputed leader, with 71.7% market shares
      by total revenues and 59.1% by volume (that is by lines). ONO has around 10% by revenues and by volume. Vodafone has 4.8% by  revenues  and
      8% by volume. Jazztel and Orange are very close in terms of market share to Vodafone. Jazztel has 4.4%  by  revenue  and  8.4%  by  volume.
      Orange has 2.5% by revenue and 8.5% by volume. There are also several other smaller  competitors  in  the  market  with  market  shares  of
      approximately 0% - 3% each, both by revenues and volume.  These are R Cable, BT, Euskaltel and Telecable.[84]

 122. On this basis, the Commission considers that following the merger, the merged entity will  be  the  new  number  two  competitor,  slightly
      stronger than ONO currently in terms of market share but still much weaker than Telefónica. In addition, although the merger will eliminate
      a competitor in the retail fixed voice market, there are a number of other competitors of similar strength  in  the  market  (most  notably
      Jazztel and Orange), which could act as alternatives to the merged entity.

 123. In light of the analysis above, the Commission concludes that the proposed transaction would not significantly impede effective competition
      on the market for the retail supply of fixed voice services.

3 Retail supply of mobile telecommunications services to end customers

 124. Both Parties provide mobile telecommunication services to end customers in Spain. While Vodafone acts as a  full  mobile  network  operator
      (MNO), ONO is an MVNO hosted on Telefónica's network. On the Spanish market, there are four active MNOs: Telefónica, Vodafone,  Orange  and
      Yoigo.

 125. The Parties have a combined market share of [20-30]% by revenues (Vodafone 27.6%, ONO [0-5]%) and [20-30]% by volume[85]  (Vodafone  23.5%,
      ONO [0-5]%).[86] The increment brought by the proposed transaction is insignificant, below or equal to [0-5]%.  On  the  narrower  possible
      market segment of mobile broadband ("dongles" or "data cards"), the Parties have  a  higher  combined  market  share,  namely  [40-50]%  by
      revenues (Vodafone [40-50]%, ONO [0-5]%) and [40-50]% by volume (Vodafone 47.7%, ONO [0-5]%). However, even on  this  market  segment,  the
      increment remains below [0-5]%.[87]

1 The Notifying Party's views

 126. The Notifying Party submits that the proposed transaction will not lead to competition concerns on  the  retail  mobile  telecommunications
      market in Spain.

 127. First, the horizontal overlap between the Parties remains limited: ONO, through its MVNO business, represents less than [0-5]% market share
      in terms of revenues and [0-5]% in terms of subscribers.

 128. Second, the Notifying Party notes that other strong competitors are active in this market: three MNOs, Telefónica (36.5%),  Orange  (22.2%)
      and Yoigo (5.4%),[88] as well as a large number of MVNOs (31 active, out of which 9 are full MVNOs and 22 are service providers).

 129. Third, the Notifying Party claims that entry by MVNOs on the Spanish market for retail mobile telecommunications has been  successful,  and
      this is demonstrated by the number of providers constantly entering the market and their growing retail market share.

 130. Fourth, the Notifying Party submits that Vodafone and ONO are not close competitors. It  also  submits  that  ONO  does  not  represent  an
      important competitive force in the retail mobile telecommunications services. ONO's mobile telecommunications services are bundled  to  its
      fixed telecommunications services in order to defend its customer base in fixed services by attempting to reduce churn in those services.

 131. Finally, the Parties submit that the proposed transaction will not have any impact on spectrum rights, as Vodafone would be affected by the
      regulatory spectrum cap in relation to regional frequency bands in 2600 MHz allocated to ONO in 2011.[89] Under the current rules, Vodafone
      will have to return [information regarding Vodafone's obligation to return spectrum rights following the proposed transaction][90], […].

2 The Commission's assessment

 132. Based on the results of the market investigation, the Commission did not identify competition concerns in relation to the market for retail
      supply of mobile telecommunications to end customers in Spain.

 133. The majority of respondents to the market investigation considered that either both  Vodafone  and  ONO,  or  at  least  Vodafone[91],  are
      important competitors on this market.[92] At the same time, the market investigation indicated that  the  Parties  will  continue  to  face
      significant competitive pressure from other strong suppliers such as Telefónica (Movistar), Orange, Yoigo and Jazztel. [93]

 134. Most respondents view Vodafone and Ono as close competitors on the market for retail  supply  of  mobile  telecommunications.[94]  In  this
      sense, respondents argued that Vodafone and ONO's offers target the same customers in the residential segment  and  they  are  both  rather
      aggressive competitors on this market. However, respondents also pointed out that ONO only provides mobile telecommunications  services  in
      relation to its multiple services bundles (which include fixed services) and that Vodafone is a much larger competitor in mobile  services.
      On this basis, the market investigation was inconclusive as regards the closeness of competition between Vodafone and ONO on this market.

 135. The majority of respondents  to  the  market  investigation  indicated  that  they  did  not  consider  ONO  an  aggressive  or  innovative
      competitor.[95] While entry on this market was considered to be difficult[96], the market investigation showed that a number  of  providers
      of retail mobile telecommunications services will remain active on the market. The respondents to the market investigation considered  that
      post-merger there would be a sufficient number of MNOs to ensure that competition  would  be  maintained  on  the  market.  One  respondent
      considered that there are more than 30 telephony brands in Spain, "which is more than enough",  while  another  stated  that  "taking  into
      account the actual number of players in the market, the emergence of a larger one and eventual disappearance of one of them would not imply
      a relevant change."[97]

 136. First, the Commission notes that the key question in this case is not so much whether Vodafone is an important competitor in  this  market,
      but whether the removal of ONO as a MVNO is likely to significantly impede effective competition on this market. ONO acts as a MVNO and its
      presence on the market is rather reduced ([0-5]% market share by revenues). The proposed transaction will thus not have an important impact
      on Vodafone's position in this market. Vodafone will remain the second largest  provider  of  retail  mobile  telecommunications  services,
      behind Telefónica.

 137. Second, the combined market share of the Parties by revenues remains below 30% for all possible market segments, with the exception of  the
      possible segment of mobile broadband (in relation to data cards / dongles), where the Parties' combined market share in  revenues  is  [40-
      50]% (Vodafone [40-50]%, ONO [0-5]%), with the increment brought  about  by  the  proposed  transaction  in  this  possible  segment  being
      insignificant.[98]

 138. Third, after the merger, Vodafone would continue to face strong competition from the three  remaining  MNOs  in  Spain,  namely  Telefonica
      (36.5%), Orange (22.2%) and Yoigo (5.4%).

 139. Moreover, when looking more closely at the position of ONO as a MVNO in Spain, the Commission notes the presence of an important number  of
      MVNOs in the Spanish market (31), out of which 9 are full MVNOs.[99] Just between the years 2009 and 2013, 15 MVNOs have entered the market
      and the large majority of them are active.[100] While entry as an MNO may be difficult because  of  costs  associated  with  acquiring  and
      maintaining spectrum, entry of MVNOs seems to be facilitated by wholesale access obligations imposed on the MNOs.

 140. Finally, the review of the Notifying Party's internal documents did not indicate that Vodafone perceived ONO as a particularly important or
      aggressive competitor on this market.

 141. In the light of the above, and in particular given the small increment, as well as the presence of several competitors on this market,  the
      Commission  concludes  that  the  proposed  transaction  would  not  significantly  impede  effective  competition  on  the  retail  mobile
      telecommunications services market and its possible segments in Spain.

2 Vertical assessment

 142. The proposed transaction also gives rise to a number of vertically affected markets, as can be seen from the following table.

                                                    Table 1 – Vertically affected markets[101]

|Upstream market                                                 |Downstream market                                               |
|Wholesale access and call origination services market           |                                                                |
|Vodafone: [30-40]%                                              |                                                                |
|ONO: not active                                                 |Retail supply of mobile telecommunication services              |
|                                                                |                                                                |
|                                                                |Vodafone: 27.6%                                                 |
|                                                                |ONO: [0-5]%                                                     |
|Wholesale mobile call termination services market               |                                                                |
|Vodafone: 100%                                                  |                                                                |
|ONO: 100%                                                       |                                                                |
|Wholesale fixed call termination services market                |                                                                |
|Vodafone: 100%                                                  |                                                                |
|ONO: 100%                                                       |                                                                |
|Wholesale fixed call termination services market                |Retail supply of fixed voice services                           |
|Vodafone: 100%                                                  |Vodafone: 4.8%                                                  |
|ONO: 100%                                                       |ONO: 10.0%                                                      |
|                                                                |Retail supply of mobile telecommunication services              |
|                                                                |Vodafone: 27.6%                                                 |
|                                                                |ONO: [0-5]%                                                     |

 143. The proposed transaction also gives rise to an indirect vertical link between the upstream market for wholesale international  roaming  […]
      and the downstream market for retail supply of mobile telecommunications, where both Parties are active.  However,  [information  regarding
      the Parties' presence ni the market for wholesale international roaming]. Therefore, the Notifying  Party  submits  that  this  is  not  an
      affected market.

 144. In any event, the Commission considers that given the low increment brought by the proposed transaction in the downstream market,  as  well
      as the fact that the upstream market is regulated[102] and there are, in any  case,  several  other  providers  of  roaming  services,  the
      proposed transaction would not significantly impede effective competition on the wholesale market for international roaming and the  retail
      supply of mobile telecommunication services market.

1 Wholesale market for access and call origination services on mobile networks – Retail supply of mobile telecommunications services

 145. MNOs supply wholesale access and call origination services which enable MVNOs to provide their own retail mobile services. In  Spain  there
      are four MNOs, out of which three are currently providing such services (Vodafone, Telefónica and Orange)[103]. The  market  for  wholesale
      access and call origination services where only Vodafone, and not ONO, is active ([30-40]% in terms of number  of  MVNOs  and  [30-40]%  in
      terms of revenues)[104] is upstream of the market for retail supply of mobile telecommunications services where  both  Parties  are  active
      (Vodafone 27.6%, ONO [0-5]% in revenues).

1 The Notifying Party's views

 146. The Notifying Party submits that the proposed transaction will not lead to any input or customer foreclosure concerns:

 147. First, the merged entity will not have the ability to engage in an input foreclosure strategy as (i)  on  the  upstream  wholesale  market,
      regulation in Spain obliges Vodafone, Orange and Telefónica to provide access and call origination services on  reasonable  terms[105]  and
      these conditions are supervised by the CNMC; and (ii) other MNOs are providing these services, such as Telefónica and  Orange.  The  merged
      entity's incentive is to retain and increase the number of MVNOs in its network, as the wholesale  access  services  provide  revenues  and
      improve the use of Vodafone's network capacity. Vodafone estimates that [30-40]% of its network is currently used  by  MVNOs.  This  is  in
      comparison to [30-40]% for Telefónica and [30-40]% for Orange.  Vodafone notes that this percentage is likely  to  decrease  and  thus  the
      corresponding revenue market share is also likely to decrease.[106]

 148. Second, with regard to a possible customer foreclosure scenario, the Notifying Party submits that given the low market share of ONO  (under
      2% in both revenues and volume) on the downstream retail market and the presence of numerous MVNOs on this market, the proposed transaction
      would not significantly impede effective competition.

2 The Commission's assessment

 149. Based on the results of the market investigation, the Commission did not identify competition concerns pertaining to the  relation  between
      the market for wholesale access and call origination services and the market for retail mobile telecommunications services.

 150. The market investigation confirmed that Spanish legislation imposes an obligation on Vodafone, Orange and Telefónica to  provide  wholesale
      access and call origination services[107] on reasonable terms.[108] The majority of respondents indicated that while entry on  this  market
      may be difficult,[109] there are enough providers of such services.[110] The large  majority  of  respondents  do  not  consider  that  the
      proposed transaction will have any effect on Vodafone's incentives in relation  to  the  provision  of  such  services,  and  none  of  the
      respondents raised any concerns that Vodafone would stop providing such services post-merger.[111]

 151. First, the Commission notes that only Vodafone is present on the upstream market for wholesale access and  call  origination  services  and
      that it was already present on the downstream market for retail mobile telecommunications services. The increment brought by  the  proposed
      transaction on the downstream market does not exceed 2% in both revenues and volume.

 152. Second, Vodafone will continue to be bound by obligations under the Spanish legislation to offer these services to MVNOs.[112]

 153. Third, the Commission considers, based on the results of the market investigation, that two strong alternative  providers,  Telefónica  and
      Orange, are present on the market.

 154. In light of the analysis above, the Commission concludes the proposed transaction would not significantly impede effective  competition  on
      the markets for wholesale access and call origination on the one hand, and retail supply of mobile telecommunications on the other hand.

2 Wholesale market for mobile call termination services – Retail supply of fixed voice services and retail supply  of  mobile  telecommunications
      services

 155. Vodafone is active on the market for wholesale mobile call termination services on its own network. ONO is also active on this  market  and
      provides mobile termination services for its own network.

 156. This wholesale market, where the Parties have a 100% market share in their respective networks ("one net-one market" principle) is upstream
      of the markets for the retail supply of fixed voice services (Vodafone 4.8%, ONO 10%) and retail supply mobile  telecommunication  services
      (Vodafone 27.6% , ONO [0-5]%).

1 The Notifying Party's views

 157. The Notifying Party submits that any possible competition concerns are excluded from the outset, as the wholesale market  for  mobile  call
      termination in Spain is subject to  regulatory  obligations  already  in  place,  including  price  caps  and  detailed  non-discriminatory
      provisions.[113]

2 The Commission's assessment

 158. The Commission notes, first, that none of the respondents to the market investigation  raised  any  concerns  related  to  vertical  issues
      arising from the transaction on the market for wholesale mobile call termination services on the one hand, and the retail supply  of  fixed
      voice services and retail mobile telecommunication services on the other hand.

 159. Second, the Commission notes that there are regulatory obligations, including price caps, applying to the wholesale mobile call termination
      market and that the Parties' combined market share on the downstream market for retail supply of fixed voice services remains under 15% (by
      revenues). In relation to the downstream market for retail supply of mobile telecommunication  services,  the  Commission  notes  that  the
      proposed transaction only brings an insignificant increment (less than [0-5]% by revenues).

 160. In light of the analysis above, the Commission concludes that the proposed transaction would not significantly impede effective competition
      on the markets for wholesale fixed call termination services and retail supply of fixed voice services on the one hand, and  retail  mobile
      telecommunication services on the other hand.

3 Wholesale market for fixed call termination services – Retail supply of fixed voice services and retail  supply  of  mobile  telecommunications
      services

 161. The wholesale market for fixed call termination services where the Parties have a 100% market share in their respective networks ("one net-
      one market" principle) is upstream of the markets for the retail supply of fixed voice services (Vodafone 4.8%,  ONO  10.0%)  and  for  the
      retail supply of mobile telecommunication services (Vodafone 27.6% , ONO [0-5]%).

1 The Notifying Party's views

 162. The Notifying Party submits that any possible competition concerns are excluded from the outset, as the wholesale  market  for  fixed  call
      termination in Spain is subject to regulatory obligations. Operators such as Vodafone  and  ONO  are  obliged  to  offer  call  termination
      services on a non-discriminatory basis and at reasonable prices.[114]

2 The Commission's assessment

 163. The Commission notes, first, that no respondent to the market investigation raised any issues  related  to  vertical  competition  concerns
      arising from the proposed transaction on the market for fixed call termination services on the one hand, and the markets for retail  supply
      of fixed voice services and of mobile telecommunications services on the other hand.

 164. Second, the Commission notes that there are regulatory obligations applying to the wholesale fixed call termination  market  and  that  the
      Parties' combined market share on the downstream market for retail supply of fixed voice services  remains  under  15%  (by  revenues).  In
      relation to the downstream market for retail  supply  of  mobile  telecommunication  services,  the  Commission  notes  that  the  proposed
      transaction only brings an insignificant increment (less than [0-5]% by revenues)

 165. In light of the analysis above, the Commission concludes that the proposed transaction would not significantly impede effective competition
      as regards the relation between the market for wholesale fixed call termination services on the one hand, and the markets for retail supply
      of fixed voice services and retail supply of mobile telecommunication services on the other hand.

3 Horizontal and conglomerate effects: Multiple-play packages

 166. The Commission has examined whether the proposed transaction would give rise to horizontal competition concerns in a  possible  market  for
      multiple play services.  In addition, as Vodafone's and ONO's services are complementary or at least closely related,  the  Commission  has
      examined whether the proposed transaction would give rise to conglomerate effects.

 167. Both Vodafone and ONO offer bundled products comprising fixed and mobile services. Vodafone has launched multiple  play  offers  comprising
      fixed telephony, broadband internet access and mobile telephony. Vodafone does not provide pay TV services  in  Spain.  ONO  commercialises
      bundles offering fixed voice services, broadband internet access, pay TV and mobile telephony. The proposed transaction will allow Vodafone
      to offer multiple play bundles comprising pay TV as well.

 168. According to the Commission's Guidelines on the  assessment  of  non-horizontal  mergers  (the  "Non-horizontal  Merger  Guidelines"),[115]
      conglomerate effects require (a) the ability to foreclose, (b) the incentives to foreclose and (c) a likelihood that a foreclosure strategy
      would have a significant detrimental effect on competition and harm consumers. In order to be taken into account, any  conglomerate  effect
      must be merger specific. In other words, the conglomerate effect must result from Vodafone's acquisition of ONO.

1 The Notifying Party's views

 169. The Notifying Party submits that the merged entity will not have the ability or the incentive to foreclose competitors from making multiple
      play offers, by denying them access to wholesale mobile services or fixed wholesale services.

 170. With regard to the wholesale mobile services, the Notifying Party submits that wholesale mobile access regulation in Spain obliges MNOs  to
      provide wholesale mobile access to competitors which intend to provide retail mobile telecommunications.

 171. In relation to both fixed and mobile components, the Notifying Party submits that  competitors  will  have  sufficient  alternatives  post-
      merger, as Telefónica is subject to wholesale fixed access obligations and other competitors of the Parties such as  Orange  already  offer
      wholesale services. Therefore, the merged entity will not have the ability to foreclose its competitors in multiple play offers by  denying
      access to wholesale services.

2 The Commission's assessment

      Horizontal assessment

 172. As regards the possible markets for multiple play services, the Parties' activities currently overlap,  as  both  ONO  and  Vodafone  offer
      multiple play packages today.  Hence the proposed transaction will lead to the elimination of a potential competitor on a  possible  market
      for multiple play.

 173. The respondents to the market investigation were overwhelmingly of the view that the provision of multiple play services is very  important
      in Spain.[116] The majority of respondents argue that bundles are very important in the Spanish telecoms  markets.  For  some  respondents,
      bundles are the only way to compete effectively in the market and represent approximately 50% of  new  client  take  up.  Some  respondents
      indicate that the ability to offer better multi-play services is the rationale of the proposed transaction. Others comment  that  it  is  a
      necessity to offer bundled services in order to compete with Telefónica and ONO.

 174. According to the market investigation responses,[117] the Parties are close competitors, in terms of  already  offering  bundled  services.
      Vodafone and ONO are already active in offering multiple play packages. However, they are  each  strong  where  the  other  is  weak,  with
      Vodafone being strong in mobile telecommunications and ONO being strong in fixed voice and broadband  and  pay  TV.  Thus,  the  Commission
      considers that the Parties' activities are largely complementary. One competitor argued that  Vodafone  is  currently  not  strong  in  the
      offering of multiple play services and that the proposed transaction will change Vodafone's position.

 175. The market investigation responses show that the proposed transaction would not have a significant effect  on  competitors  and  consumers.
      Although the proposed transaction would remove an important competitor,  that  is  ONO,  from  the  multiple  play  segment,  a  number  of
      alternative operators are currently already offering multiple play services, including Telefónica,  Jazztel,  Pepemobile,  Orange  and  the
      regional cable operators in northern Spain.  As there are different types of multiple play bundles  depending  on  the  types  of  services
      offered, the Commission does not have separate market shares for bundles. However, the multiple play offerings are calculated  as  part  of
      the single service offerings, which means that the individual services give a strong indication of the competitive position of each  party.
      The market shares of the individual services indicate that Telefónica is the undisputed leader in  the  fixed  voice,  fixed  internet  and
      mobile telecommunications retail markets and that there are a number of telecommunications providers who offer multiple play bundles as  an
      alternative to the merged entity.

 176. These competitors would act as alternatives to the merged entity. Although a few competitors expressed concerns about  the  elimination  of
      competition between Vodafone and ONO in relation to multiple play bundles, many competitors and customers argued that a number of suppliers
      of multiple play offers active in the market would still be in a position to compete with the merged entity.[118]

 177. The Commission considers that the proposed transaction will eliminate a competitor from the  multiple  play  segment.  However,  there  are
      several competitors to the merged entity which will continue to offer multiple play packages in competition  to  the  merged  entity.   The
      merged entity will become a stronger competitor, which will be in a better position to compete with the leading operator,  Telefónica.   In
      addition, there are other providers of multiple play services which are alternatives to the merged entity.

 178. In light of the analysis above, the Commission concludes that the proposed transaction would not significantly impede effective competition
      on the possible market for multiple play services.

      Conglomerate effects assessment

 179. The Commission has also assessed the likely impact of the proposed transaction on the merged entity's ability and incentive  to  grant  its
      competitors in multiple play services access to the components of these services that it would control.

 180. In terms of entry into the multiple play segment, results of the market investigation  were  mixed,  but  a  number  of  telecommunications
      providers indicated that they are interested in offering multiple play services. In terms of a new entrant in the telecoms sector  offering
      multiple play services, some respondents considered that this is very difficult because of barriers to entry  and  because  the  sector  is
      already saturated with a number of current operators offering multiple play services.

 181. The Commission considers that the merged entity would not have the ability to foreclose competitors from  offering  elements  of  fixed  or
      mobile telecommunications services to create multiple play bundles.

 182. In relation to wholesale mobile access and origination services, as discussed above, regulation in Spain obliges MNOs to provide access and
      call origination services on reasonable terms[119] and these conditions are supervised by the CNMC. In addition, currently other MNOs  such
      as Telefónica and Orange are providing these services.  Therefore, the merged entity would not have the ability to foreclose competitors in
      multiple play services from obtaining mobile wholesale access.

 183. In relation to fixed wholesale access, the Commission notes that the telecommunications incumbent Telefónica is subject to wholesale  fixed
      access regulation, which is supervised by the CNMC.  Therefore, the merged entity will not have the ability to foreclose its competitors in
      multiple play offers by denying access to fixed wholesale services, as competitors have a regulated alternative option.

 184. In light of the analysis above, the Commission concludes that the proposed transaction would not significantly impede effective competition
      on any of the markets for the components of the multiple play offers.

CONCLUSION

 185. For the above reasons, the European Commission has decided not to oppose the notified operation and  to  declare  it  compatible  with  the
      internal market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation.

For the Commission
(Signed)

Joaquín ALMUNIA
Vice-President

-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
('TFEU') has introduced certain changes, such as the replacement of 'Community'  by  'Union'  and  'common  market'  by  'internal  market'.  The
terminology of the TFEU will be used throughout this decision.

[2]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
C95, 16.04.2008, p. 1).
[3]   Vodafone, email to the Commission, 23 June 2014.

[4]   Commission decision COMP/M.5532 – Carphone Warehouse/Tiscali UK, paragraphs 26 onwards.

[5]   See replies to Commission Questionnaire to competitors and business customers and consumer associations of 2 June 2014, question 2.

[6]   Commission decision COMP/M.5532 – Carphone Warehouse/Tiscali UK, paragraph 10.

[7]   See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 2.

[8]   Commission decision COMP/M.5532 – Carphone Warehouse/Tiscali UK, paragraph 20.

[9]   See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 3,  and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 3.

[10]  Commission decision in case COMP/M.5532 – Carphone Warehouse/Tiscali UK, paragraph 47.

[11]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 11, and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 11.

[12]  Commission decision in case COMP/M.6584 – Vodafone/Cable&Wireless, paragraph 11.

[13]  Commission decision in case COMP/M.5532 – Carphone Warehouse/Tiscali UK, paragraph 37.

[14]  Commission decision in case COMP/M.6990 – Vodafone/Kabel Deutschland, paragraphs 130-131.

[15]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 4,  and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 4.

[16]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 6,  and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 6.

[17]  Commission decision in case COMP/M.5532 –  Carphone  Warehouse/Tiscali  UK,  paragraph  56;  Commission  decision  in  case  COMP/M.6990  –
Vodafone/Kabel Deutschland, paragraph 137.

[18]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 11, and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 11.

[19]  The term international voice calls is used for calls that are made by a domestic user when in its  home  country,  but  that  terminate  at
destinations which are abroad such as if the receiving number is a foreign one.

[20]  Commission decision in case COMP/M.3245 – Vodafone/Singlepoint; Commission decision in case COMP/M. 3530 – Telia Sonera/Orange;  Commission
decision in case COMP/M. 3916 – T-Mobile Austria/Tele.ring.

[21]  Commission decision in case COMP/M. 6497 – Hutchison 3G Austria/Orange Austria, paragraph 58.

[22]  Commission decision in case COMP/M. 6992 – H3G/Telefónica Ireland, paragraph 141 onwards.

[23]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 7,  and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 7.

[24]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, questions  8  and  9,  and  Questionnaire  to
business customers and customer associations of 3 June 2014 questions 8 and 9.

[25]  Commission decision in case COMP/M.5650 – T-Mobile/Orange; Commission decision in case COMP/M. 3916 – T-Mobile Austria/Tele.ring.

[26]  Commission decision in case COMP/M.6990 – Vodafone/Kabel Deutschland, paragraphs 218-219.

[27]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 11, and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 11.

[28]  Commission decision in case COMP/M.6990 – Vodafone/Kabel Deutschland, paragraph 43.

[29]  Commission decision in case COMP/M.6990 – Vodafone/Kabel Deutschland, paragraphs 259-261.

[30]  Commission decision in case COMP/M.5900  –  LGI/KBW,  paragraphs  183-186;  Commission  decision  in  case  COMP/M.5734  –  Liberty  Global
Europe/Unitymedia, paragraphs 43-48 (both for the German market). Commission decision in case COMP/M.6584 –  Vodafone/Cable&Wireless,  paragraphs
102-104 (for the UK). However, in the Vodafone/Cable&Wireless decision, the Commission stated with respect to  quadruple  play  that  the  market
investigation had confirmed that "the joint purchasing of mobile and fixed as one package has been the exception rather than the rule".

[31]  See replies to Commission Questionnaire to competitors of 2 June 2014, question 42.

[32]  See replies to Commission Questionnaire to competitors of 2 June 2014, question 43.

[33]  See replies to Commission Questionnaire to business customers and consumer associations of 3 June 2014, question 37.

[34]  See replies to Commission Questionnaire to competitors of 2 June 2014, questions 44 and 45.  

[35]  Commission decision in case COMP/M.5900 – LGI/KBW, paragraphs 187-189.

[36]  Commission decision in case COMP/M.6990 – Vodafone/Kabel Deutschland, paragraphs 263-265.

[37]  Commission decision in case COMP/M.6990 – Vodafone/Kabel Deutschland, paragraphs 263-265.

[38]  Commission decision in case COMP/M.4947 – Vodafone/Tele2 Italy/Tele2 Spain, paragraph 13.

[39]  Commission decision in case COMP/M.5650 – T-Mobile/Orange United Kingdom, paragraph 31.

[40]  Commission decision in case COMP/M.6584 – Vodafone/Cable&Wireless, paragraphs 23-24.

[41]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 10, and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 10.

[42]  Commission decision in case COMP/M.3920 – France Telecom/Amena, paragraph 30; Commission decision in case  COMP/M.5650  –  T-Mobile/Orange,
paragraph 38; Commission decision in case COMP/M.6584 –  Vodafone/Cable&Wireless,  paragraph  24;  Commission  decision  in  case  COMP/M.6990  –
Vodafone/Kabel Deutschland, paragraph 119.

[43]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 11, and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 11.

[44]  Commission decision in case COMP/M.6584 – Vodafone/Cable&Wireless, paragraphs 47-48.

[45]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 10, and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 10.

[46]  Commission decision in case COMP/M.5650 – T-Mobile/Orange, paragraph 38.

[47]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 11, and  Questionnaire  to  business
customers and customer associations of 3 June 2014 question 11.

[48]  Commission decision in case COMP/M.6584 – Vodafone/Cable&Wireless, paragraph 45.

[49]  Regulation (EU) 531/2012 of the European Parliament and the Council of 13 June 2012 on roaming on public communications network within  the
Union.

[50]  Commission decision in case COMP/M.6584 – Vodafone/Cable&Wireless, paragraph 45; Commission decision in case COMP/M. 6990 –  Vodafone/Kabel
Deutschland, paragraph 250-252.

[51]  Commission decision in case COMP/M. 6992 – H3G/Telefónica Ireland, paragraph 151; Commission decision in case COMP/M.6497  –  Hutchison  3G
Austria/Orange Austria, paragraph 78; Commission decision in case COMP/M.5650 –  T-Mobile/Orange,  paragraph  35;  Commission  decision  in  case
COMP/M.4748 – T-Mobile/Orange Netherlands, paragraph 27; Commission decision in case COMP/M.3916  –  T-Mobile  Austria/Tele.ring,  paragraph  28;
Commission decision in case COMP/M. 6990 – Vodafone/Kabel Deutschland, paragraph 252.

[52]  Where this Decision makes reference to "affected markets", it refers to instances where: for horizontal overlaps, the Parties  are  engaged
in business activities in the same relevant market and where the concentration will lead to a combined market share of 20% or more; for  vertical
overlaps, where one or more of the Parties are engaged in business activities in a  relevant  market,  which  is  upstream  or  downstream  of  a
relevant market in which any other party to the concentration is engaged, and any of their individual or combined market shares at  either  level
is 30% or more, regardless of whether there is or is not any existing supplier/customer relationship between the Parties.  See  section  6.3.  of
Annex I (Form CO relating to the notification of a concentration pursuant to regulation (EC) No 139/2004) of Commission  Implementing  Regulation
(EU) No 1269/2013 of 5 December 2013 amending Commission Regulation (EC) No 802/2004 implementing Council Regulation  (EC)  No  139/2004  on  the
control of concentrations between undertakings. Official Journal OJ L 336, 14.12.2013, p. 1-36.

[53]  Volume is measured by number of lines.

[54]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[55]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[56]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[57]  Guidelines on the assessment of horizontal mergers under the Council Regulation on the  control  of  concentrations  between  undertakings,
(2004/C 31/07), paragraph 18.

[58]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[59]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 13.1, and Questionnaire to  business
customers and customer associations of 3 June 2014, question 13.1.

[60]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 12, and  Questionnaire  to  business
customers and customer associations of 3 June 2014, question 12.

[61]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 14.1, and Questionnaire to  business
customers and customer associations of 3 June 2014, question 14.1.

[62]  See replies to Commission Questionnaire to business customers and customer associations of 3 June 2014, question 14.3.

[63]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, questions 15  and  17  and  Questionnaire  to
business customers and customer associations of 3 June 2014, questions 15 and 17.

[64]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 22.  As regards barriers  to  entry,
several respondents complained about the lack of regulated wholesale access to ultrafast  internet  access  (above  30Mbps),  which  would  allow
alternative operators to gradually build their own very high broadband ("VHBB") infrastructure without losing customers.  However,  this  concern
is unrelated to the proposed transaction.

[65]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 20, and  Questionnaire  to  business
customers and customer associations of 3 June 2014, question 20.

[66]  Paragraph 18.

[67]  Source: Vodafone's reply to the Commission's RFI No 3 of 18 June 2014, table 9.

[68]  Very-high-bit-rate digital subscriber line 2.

[69]  CNMC March 2014 Análisis Geográfico De Los Servicios De Banda Ancha Y Despliegue De NGA En España (Annex 12). See:

      http://www.cnmc.es/Portals/0/Ficheros/Telecomunicaciones/Informes/20140324_InfGeografico_jun13.pdf

[70]  Additionally, Vodafone and Orange expressed an ambition of deploying 6 million BUs in the total period between  March  2013  and  September
2017. This extension of the roll-out commitment is subject to individual analysis of Vodafone and Orange who, considering  various  internal  and
external  factors  (among  others  market  situation  and   regulation),   are   free   to   agree   or   not   on   further   deployments.   See
http://www.orange.com/en/finance/nbsp2/investors-and-analysts/financial-press-releases/Orange-and-Vodafone-sign-an-agreement-to-deploy-fiber-
networks-in-Spain; http://www.vodafone.com/content/index/media/vodafone-group-releases/2013/fibre_spain.html

[71]  Subject to the completion of the proposed transaction and to the outcome of the ongoing negotiations between Vodafone and Orange,  Vodafone
may provide Orange at its request with access to up to 1 million building units already connected to ONO's network. The price  for  this  service
will be [details regarding the price of the service]. As a result, the number of building units of the FTTH roll-out commitment in the  agreement
between Vodafone and Orange would be reduced from 3 million building units to 2 million building million units (1 million for each party  instead
of 1.5 million previously).

[72]  Currently Telefónica represents 84.9% of FTTH accesses in service, according to CNMC. See CNCM monthly report for December 2013.

[73]  For instance http://www.expansion.com/2014/04/05/empresas/tmt/1396710408.htmlhttp://www.europapress.es/economia/noticia-economia-
telefonica-preve-hacer-llegar-fibra-optica-mas-10-millones-hogares-ano-80-2016-20140402140556.html (access on 7 April 2014).
http://saladeprensa.telefonica.com/documentos/nprensa/NdP_Movistar_NUEVA_OFERTA_Fusion_TV_vfinal_250414_0.pdf

[74]  http://corporativo.jazztel.com/documents/10156/52144/Jazztel+obtiene+un+beneficio+neto+de+67,6+millones+de+euros.

      It should also be noted that the EIB and Jazz Telecom SA (Jazztel) signed in April 2014 a EUR 150 million loan agreement for  financing  of
FTTH network: http://europa.eu/rapid/press-release_BEI-14-78_en.htm

[75]  CNMC March 2014 Análisis Geográfico De Los Servicios De Banda Ancha Y Despliegue De NGA En España (Annex 12).

[76]  The Spanish regulation imposes an obligation on Telefónica to provide wholesale broadband access services with nominal speed up to 30  Mbps
to all operators at cost-orientated prices.

[77]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[78]  Volume is measured by number of lines.

[79]  The Notifying Party submits that it does not have information on the competitors' market shares in terms of revenues  for  the  residential
segment. However, in terms of lines, competitors' market shares are as follows:  Telefónica:  51.9%,  Jazztel  11.3%  and  Orange  10.6%  in  the
residential  segment  (Source:  data  provided  by  the  Notifying  Party   on   the   basis   of   the   CNMC   Fourth   Quarter   2013   Report
(http://data.cnmc.es/datagraph/)).

[80]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[81]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[82]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 13.2 and Questionnaire  to  business
customers and customer associations of 3 June 2014, question 13.2.

[83]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 16  and  Questionnaire  to  business
customers and customer associations of 3 June 2014, question 16.

[84]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[85]  Volume is measured by number of lines.

[86]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[87]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[88]  Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[89]  In 2011, ONO obtained licenses of 10 MHz FDD in the 2.6 GHz band on a  regional  basis  (Cantabria,  Cataluña,  Valencia,  Madrid,  Murcia,
Navarra, La Rioja, Ceuta and Melilla). [Information about volume and territorial scope of the spectrum rights for which ONO obtained licenses  in
2011].

      [90]

            http://corporativo.jazztel.com/documents/10156/52144/Jazztel+obtiene+un+beneficio+neto+de+67,6+millones+de+euros

            It should also be noted that the EIB and Jazz Telecom SA (Jazztel) signed in  April  2014  a  EUR  150  million  loan  agreement  for
      financing of FTTH network: http://europa.eu/rapid/press-release_BEI-14-78_en.htm

[91]  A few respondents justified their answer referring to Vodafone Spain belonging to one of the most important  telecommunications  groups  in
the world.

[92]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 25, and  Questionnaire  to  business
customers and customer associations of 3 June 2014, question 23.

[93]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 24, and  Questionnaire  to  business
customers and customer associations of 3 June 2014, question 22.

[94]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 26, and  Questionnaire  to  business
customers and customer associations of 3 June 2014, question 24.

[95]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, questions 27 and  28,  and  Questionnaire  to
business customers and customer associations of 3 June 2014, questions 25 and 26.

[96]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 31, and  Questionnaire  to  business
customers and customer associations of 3 June 2014, question 28.

[97]  See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 30, and  Questionnaire  to  business
customers and customer associations of 3 June 2014, question 42.4.

[98]  Furthermore, according to data submitted by the Notifying Party, the data cards segment is declining in  Spain  (a  reduction  in  2012  of
25.6% compared to 2011). This trend has continued in 2013, the data cards segment falling further by 22%, according to CMT and CNMC's report  for
the fourth quarter of 2013.

[99]  ONO, Digi Mobil, Fon You, Euskatel, Telecable, R, Lycamobile, Jazztel, E-plus (Simyol).

[100]       Digi Spain, More Minutes, RACC, FonYou, Orbitel, You Mobile, Zero Movil, Lyca Mobile, Tuenti, Oceans, K Moviles,  LCR,  Ibercom,  PTV
Telecom, Procono, Aire.

[101] Source: data provided by the Notifying Party on the basis of the CNMC Fourth Quarter 2013 Report (http://data.cnmc.es/datagraph/).

[102]       Prices in this market are capped at EU level by the Roaming Regulation - Regulation (EU) No 531/2012 of the European  Parliament  and
      of the Council of 13 June 2012 on roaming on public mobile communications networks within the Union.

[103]       The Notifying Party submits that all of the MNOs in Spain are  able  to  provide  wholesale  access.  Yoigo  and  Telefónica  have  a
reciprocal agreement whereby Yoigo provides Telefónica access to its 4G network and Telefónica provides Yoigo national roaming services  for  the
areas where Yoigo network coverage is limited.

[104]       In terms of the market share by number of MVNOs hosted on each MNO network,  Vodafone  has  [30-40]%,  Telefónica  has  [30-40]%  and
Orange has [30-40]% (figures based on Vodafone's internal estimates).

[105]       Article 4.6 of Royal Decree 458/2011 related to the 900  MHz  band.  A  general  obligation  to  provide  wholesale  access  is  also
established in CMT Decision regarding the market 15 of the Commission Recommendation of 11 February 2003 (Decision of CMT dated on  2nd  February
2006), which has not been subject to the mandatory review.

[106]       Vodafone currently hosts seven MVNOs. At the moment, Vodafone hosts [information regarding the MVNOs  currently  hosted  by  Vodafone
and other MVNOs].

[107]       However, a few market participants complained about the limited scope of this regulation which does not give  MVNOs  real  commercial
negotiating power with the MNOs. The Commission considers that these complaints are not merger specific,  therefore  they  will  not  be  further
analysed in this decision.

[108]       See replies to Commission Questionnaire to competitors and trade associations of 2 June  2014,  question  33,  and  Questionnaire  to
business customers and customer associations of 3 June 2014, question 30.

[109]       See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 36.

[110]       See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 35.

[111]       See replies to Commission Questionnaire to competitors and trade associations of 2 June  2014,  question  41,  and  Questionnaire  to
business customers and customer associations of 3 June 2014, question 34.

[112]       The regulation applies until May 2015. This term can be extended by the CNMC if the market conditions so require.

[113]       CMT Decision dated 10.5.2012 in case MTZ 2011/2503 corresponding to market 7 in Commission Recommendation  of  17  December  2007  on
relevant product and service markets within the electronic communications sector susceptible to ex ante regulation in accordance  with  Directive
2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services.

[114]       The provision of wholesale fixed call termination services is a regulated market  where  reference  prices  are  established.  Direct
termination in Telefónica is regulated by Interconnection Regulated Offer ("OIR"). CMT decision of 18.11.2010  (MTZ  2008/210).  Operators  other
than Telefónica are obliged to offer reasonable prices. In practice, Vodafone is applying the reference price  (OIR  plus  30%),  which  in  turn
apply such price to Vodafone.

[115]       Guidelines on the assessment of non-horizontal mergers under  the  Council  Regulation  on  the  control  of  concentrations  between
undertakings (2008/C 265/07), paragraph 91 onwards.

[116]       See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, questions 42 to 44.

[117]       See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, question 46.

[118]       See replies to Commission Questionnaire to competitors and trade associations of 2 June 2014, questions 49 and 50.

[119]       Article 4.6 of Royal Decree 458/2011 related to the 900  MHz  band.  A  general  obligation  to  provide  wholesale  access  is  also
established in CMT Decision regarding the market 15 of the Commission Recommendation of 11 February 2003 (Decision of CMT dated on  2nd  February
2006), which has not been subject to the mandatory review.

-----------------------
 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

                                                                 MERGER PROCEDURE