AOL ISP Sale to Telecom Italia OK’d by E.U.

The European Commission gave the go-ahead for the 675 million-euro sale (US$887 million) of AOL’s German ISP to Telecom Italia Wednesday, after a monthlong probe of the deal.

“The Commission’s examination of the proposed transaction showed that the horizontal overlaps between the activities of Telecom Italia and AOL in Germany (i.e., broadband and narrowband Internet access services) are limited and that the combined firm would continue to face a number of strong, effective competitors, notably the incumbent Deutsche Telekom,” the commission said in a statement.

Time Warner has been retreating from AOL’s Internet access business in Europe, where its subscriber numbers have been declining. In September it agreed to sell its French operation to Neuf Cegetel for 288 million euros, and has been in talks with suitors in the United Kingdom, including satellite TV broadcaster British Sky Broadcasting Group.

The company has about 5.9 million customers for its three European divisions, in the United Kingdom, France and Germany. For Telecom Italia, the deal is part of a reorganization away from telephony toward broadband Internet access. Buying AOL Germany will help consolidate its broadband access service in Europe, the company said recently. The move would make the company the second-largest Internet access provider in Germany with more than 3 million subscribers, it said.

Under the deal’s terms, AOL will provide Telecom Italia with cobranded entertainment services to all of its residential customers for five years. AOL will also retain responsibility for all online advertising, also for five years.

-Paul Meller, IDG News Service (Brussels Bureau)

Related Links:

• AOL to Sell German ISP to Telecom Italia for $853M

• AOL to Sell Off AOL France

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