Freenet wants Telefonica, E-Plus to offer cheap network access

By Foo Yun Chee

BRUSSELS, March 28 (Reuters) - Telefonica (Madrid: TEF.MC - news) , which wants to buy KPN (Amsterdam: KPN.AS - news) 's E-Plus unit in Germany, should be forced to give rivals cost price access to its German network and sell some of its prepaid brands, German telecoms and Internet services provider Freenet (Xetra: A0Z2ZZ - news) said on Friday.

Freenet's comments echo concerns by German Internet service provider United Internet (Xetra: UTDI.DE - news) that the 8.6-billion-euro ($11.82 billion) deal may lessen competition in Europe's biggest market.

Freenet, which operates virtual network Mobilcom-Debitel, called on the European Commission, which is now examining the deal, to demand tough concessions from Telefonica before giving its approval.

"Technology-neutral, cost-based resale access should be part of the set of remedies which could mitigate the impact resulting from the transaction," Freenet said in a statement.

"Additionally it may be necessary for the merging parties to sell at least some of their No Frills/prepaid brands, for example blau, FONIC, simyo, ALDI, to non-MNO (mobile network operator)," it said.

Albert Fetsch, spokesman for Telefonica Deutschland , declined to comment.

Telefonica is expected to submit concessions to the European Union competition watchdog next week, which has set a May 14 deadline for its decision.

($1 = 0.7278 Euros) (Reporting by Foo Yun Chee; Editing by Sophie Walker)