The European Union's antitrust authority has approved mobile network operator Telefonica's 8.55 billion-euro ($11.7 billion) bid to buy its competitor E-Plus under certain conditions, creating Germany's biggest mobile phone company in terms of customers.

The EU Commission said Wednesday the deal is conditional on Telefonica selling up to 30 percent of the merged company's network capacity to service providers to boost competition.

It says Telefonica must also shed some assets and improve conditions offered to service providers. Those firms sell mobile phone contracts without having their own network, relying on wholesale agreements with incumbent operators.

Telefonica agreed to purchase E-Plus from Dutch telecommunications company Royal KPN NV, after winning the support of KPN's biggest shareholder, Mexican billionaire Carlos Slim.

Telefonica plans to merge E-Plus with its own German arm, O2.