EU regulators would investigate in detail plans by French mobile phone operator SFR to buy Tele2 AB's French fixed-line telephone and broadband unit, saying they believed the deal could shrink competition in the French pay-TV sector, an Associated Press report said.
SFR is jointly controlled by French media conglomerate Vivendi and British telecom company Vodafone.
The Associated Press report said Vivendi also owns the leading French pay-TV network Canal Plus, and the European Commission said this led it to believe that the deal 'is likely to give rise to competition concerns' because it would combine two direct rivals as well as businesses involved in the same supply chain.
It set a deadline of Aug. 2 to decide whether to clear or block the deal, the report said.
Swedish telecom company Tele2 AB said in October it would sell its French fixed-line telephone and broadband unit to SFR for $450 million, the report added.
The report further quoted regulators as saying that their investigation has already shown that the deal could weaken other high-speed Internet operators who are the main rivals to Canal Plus and 'could therefore lead in due course to an increase in prices and a deterioration in the quality of supply.'