BRUSSELS – Telephone, Internet and Cable TV: The European Union stands to lose part of its own telecommunications market by selling part of it to the United Arab Emirates. The European Commission has approved the acquisition of PPF Telecom Group BV (PPF) by Emirates Telecommunications Group Company PJSC (e&), giving the Emirati company full control of the group, which operates in Bulgaria, Slovakia, Hungary, Serbia and the Czech Republic. The approval is conditional, excluding the Czech market from the non-European company’s future operations.
Overall, the PPF serves more than 10 million telecommunications customers. Non-European operators are responsible for network security for European users. The EU does not prohibit them from operating, taking into account the free market and the free movement of goods and services. However, this choice removes critical infrastructure from EU management and control. Competition Commissioner Margrethe Vestager limited her review to those related to her own portfolio and welcomed the merger proposal, which has progressed smoothly thanks to market rules.
But in the background, Europe remains a player in selling its telecommunications infrastructure and services to foreign operators. A good example of this is the case of Italia Telecom and KKR. The European debate has focused on China’s penetration into the EU market, with a clear call to ensure that critical infrastructure such as telecommunications networks do not fall into Beijing’s hands. But European countries are moving in the opposite direction, towards strategic autonomy and their own sovereignty.
Among the conditions set by the EU antitrust authorities are that e& must report any future acquisitions to the Commission, a ban on Emirates and e& financing the PPF’s activities in the EU internal market, and an undertaking that e&’s articles of association will not deviate from normal UAE insolvency law, which would result in the cancellation of unlimited state guarantees. These guarantees will be valid for 10 years and are subject to renegotiation. Meanwhile, the EU will take parts of the network into its own hands and leave them in the hands of third countries.
English version by Withub’s translation service
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