Mobile rivals raise competition concerns over £31bn O2-Virgin merger
Rivals have hit out at the planned £31bn mega-merger between O2 and Virgin Media, warning the deal could harm competition in the UK telecoms market.
The Competition and Markets Authority (CMA) last month referred the tie-up for an in-depth investigation after the two companies asked the regulator to fast-track its probe.
In the full text of its decision, the watchdog said a “number of third parties” had raised concerns that the combined company could “restrict access to these services, degrade the quality of its service provision or increase the price it charges for wholesale mobile services”.
Rivals raised concerns that the joint venture could push up the price mobile operators have to pay to lease network infrastructure.
The firms warned this could have a “significant negative impact on their costs and their retail mobile business”.
The CMA agreed that the deal could lead to a “substantial lessening of competition” and referred the transaction for an in-depth phase two investigation.
If approved, the deal between O2 parent company Telefonica and John Malone’s Liberty Global, would create a new telecoms behemoth serving 46m customers.
The firms previously asked the watchdog to fast track its investigation to phase two. Companies are allowed to request this when it is clear from an early stage that the deal requires closer scrutiny.
Liberty Global and Telefonica said the companies were pleased that the probe had been moved to phase two.
“We are working constructively with the CMA to achieve a positive outcome,” a spokesperson said. “We believe that the transaction is pro-competitive and continue to expect closing around the middle of the year.”