Three-O2 merger in doubt as UK watchdog slams Brussels investigation –

6 months ago Comments Off on Three-O2 merger in doubt as UK watchdog slams Brussels investigation –

In a letter to the Commission, Alex Chisholm, the CMA’s chief executive, wrote: “The proposed remedies are materially deficient as they will not lead to the creation of a fourth mobile network operator capable of competing effectively and in the long term.”

He urged the Commission’s competition chief, Margrethe Vestager, to “prevent the long-term damage to the UK telecoms market” by attaching more onerous conditions to the merger.

Instead, he proposes forcing a merged Three and O2 to sell off some of its mobile network infrastructure and spectrum – the airwaves that carry voice and data – so that a fourth mobile network can be set up. Otherwise, Mr Chisholm said the “only option” was to stop the deal.

It comes after a similar deal in Denmark collapsed after Brussels attached onerous concessions, including selling off spectrum, which effectively blocked the merger.

Tom Mockridge, the chief executive of Virgin Media, criticised the CMA’s intervention, highlighting its decision earlier this year to approve BT’s £12.5bn takeover of EE unconditionally. Virgin Media hopes to benefit from the merger of Three and O2 by getting a better deal for its own mobile service, which is currently hosted on the EE network.

Mr Mockridge said: “Less than three months ago the CMA approved the merger of BT/EE, without remedies, despite concerns that this concentrated too much valuable spectrum in the hands of one provider.

BT/EE now has 45pc of total UK spectrum, including 60pc of the higher frequency spectrum best-suited to 4G services, particularly in urban areas.  In comparison Vodafone has 28pc of UK spectrum, O2 has 15pc, and Three has 12pc.  This is the very reason it is now difficult to create a new, fourth mobile network operator.

“A combined O2/Three would provide a counter balance to the strength of BT/EE, offering an alternative source of capacity to other providers who will drive competition in their own right.”


Three-O2 merger in doubt as UK watchdog slams Brussels investigation –