To alleviate regulatory concerns over its proposed $11.8 billion merger with KPN’s E-Plus unit, Telefonica has offered the European Commission (EC) various concessions to facilitate the entry of a new wireless rival in Germany. Outlined in documents obtained this week by the Financial Times, the concessions have been forwarded by the EC to German wireless carriers along with a questionnaire that asks whether the proposals are sufficient to maintain an adequate level of competition in Germany, the single largest wireless market in the European Union (EU). Announced last summer, the planned union of E-Plus, the nation’s fourth-largest mobile operator, and Telefonica Deutschland, Germany’s third-largest wireless carrier, would not only create the nation’s largest wireless operator but would also reduce the number of German national wireless competitors from four to three. The EC launched an in-depth probe into the transaction in December, and a report issued earlier this month by Germany’s network regulator asserts that the EC is likely to condition approval on pledges by the merged entity to divest a portion of its 900 MHz and 1800 MHz spectrum assets. As part of its proposed, voluntary remedy, Telefonica has offered to lease (rather than divest) to a new market entrant 40 MHz of high-frequency spectrum that provides coverage to 50% of the country’s urban population. Telefonica also committed to lease up to ten percent of its spectrum throughout the rest of Germany but stipulated that its offer will expire at the end of this year if no takers come forward. Among other things, Telefonica also said it would (1) provide access on its network for up to three mobile virtual network operators at wholesale rates, and (2) immediately sell 8,000 cell sites and market an additional 2,000 sites for sale at a later date. Observers predict that EU competition commissioner Joaquin Almunia will hand down his ruling on the deal in June.