EU warns Orange's Belgian deal may hurt competition, opens probe

By Foo Yun Chee

BRUSSELS (Reuters) - EU antitrust regulators opened on Thursday a full-scale investigation into French telecoms provider Orange's bid for a majority stake in Belgian peer VOO SA, warning that it may reduce competition in the southern region of Belgium.

The planned acquisition of 75% of VOO values the company at 1.8 billion euros ($1.8 billion) and is part of Orange's strategy of offering "convergent offers" in both broadband and mobile to customers in all European countries.

The European Commission said the deal would cut the number of operators from three to two in the areas where the companies compete.

The deal may also reduce competition in the retail markets for fixed internet services, audio-visual services and multiple-play bundles (including fixed-mobile convergent services).

Reuters had reported the imminent EU investigation on Wednesday.

"With our in-depth investigation, we want to make sure that the acquisition of VOO/Brutele by Orange does not lead to higher prices or less quality for customers in Wallonia and parts of Brussels," Commission Vice-President Margrethe Vestager said in a statement.

Brutele provides retail fixed telecom services through its own cable network, which it markets together with VOO under the 'VOO' brand. The EU competition enforcer set a Dec. 6 deadline for its decision on the deal.

Orange would gain control over VOO's cable network in Belgium's French-speaking Wallonia region and part of the Brussels area via the deal, pitting it against rival Telenet.

($1 = 0.9840 euros)

(Reporting by Foo Yun Chee)