The European Commission (EC) may be about to throw a spanner in the works of Three’s planned £10.25bn takeover of O2.
Having decided not to refer the decision to the Competition and Markets Authority (CMA) in the UK, the commission, the executive body of the EU, has until 22 April to make a decision on the merger, which would create the UK’s largest mobile phone provider.
However, the commission could publish later this month, and as early as this week, a statement of objections to the deal, the Sunday Telegraph reported.
The EC may call for CK Hutchison, the Hong Kong-based owner of Three, to sell some of its mobile network capacity to rivals in the UK to boost competition.
Mobile capacity, or spectrum, is a finite resource, shared between all operators.
If Hutchison buys O2 from its Spanish owner Telefonica, the combined company would control 40 per cent of the UK market.
EU competition Commissioner Margrethe Vestager has previously said the combination of the second and fourth largest mobile networks in the country raised “concerns that the transaction could lead to higher prices, less choice and reduced innovation.” She believes there should be four major mobile operators, rather than three, to ensure sufficient competition.