(Telecompaper) The European Commission has approved Telefonica's takeover of German mobile operator E-Plus from KPN. The merger of E-Plus with Telefonica's O2 will reduce the German market to three mobile networks from four and is expected to help O2 compete better with market leaders Telekom Deutschland and Vodafone. To secure approval for the takeover, Telefonica committed to reserve up to 30 percent of its network capacity for MVNOs. It earlier announced an agreement to provide the network capacity to Drillisch. Telefonica will also be required to divest spectrum to a new player on the market and maintain all its existing wholesale contracts. The takeover of E-Plus was first announced almost a year ago and will see KPN receive EUR 5 billion cash and a 20.5 percent stake in the merged company. The Dutch operator is exiting the German market in order to focus more on its home market. Telefonica will hold 62.1 percent in the German subsidiary, while the remainder is listed on the stock market.