The deal between Spain's second-largest telecoms provider and fourth-ranked MasMovil announced in July last year is seen as a test of whether EU regulators will loosen their tough line on telecoms consolidation.

The Commission opened a full-scale investigation earlier this month, warning that the deal would eliminate an innovative and significant rival in Spain that could result in higher prices and lower quality of telecoms services.

($1 = 0.9061 euros)

(Reporting by Foo Yun Chee, Editing by Louise Heavens)