Out-Law / Your Daily Need-To-Know

Three promises to work with rivals if merger approved

16 Feb 2016, 10:11 am

CK Hutchison, the owner of the Three mobile network, has promised to work with its rivals on sharing mast networks to maintain competition in the UK market if the European Commission allows a merger with O2, the Financial Times has reported.

The European Commission is scrutinising Hutchison's purchase of O2 from telecoms giant Telefónica in what it said will be an "in-depth" investigation.

The Commission has said it is concerned the proposed £10.25 billion transaction "could lead to higher prices, less choice and reduced innovation for customers of mobile telecommunications services in the UK".

David Dyson, chief executive of Three UK, told the Financial Times that the group was in talks with its network-sharing partners and rivals to tackle the Commission's concerns about the loss of competition caused by removing one of the four mobile groups: currently Three, EE, O2 and Vodafone.

Three has spoken to both EE and Vodafone and "made commitments that we will honour the existing contractual agreement" on how the groups share mast networks, Dyson told the Financial Times.

Ofcom CEO Sharon White recently expressed concern that the merger, and reduction in number of network operators, could lead to higher prices for customers and less retail competition.

White said Ofcom had written to the Commission to outline its view that "competition, not consolidation, has driven investment" in the UK's mobile market.

Earlier this month Virgin Media called for the European Commission to allow Hutchison to buy O2, after it promised to open its network to competitors to provide more capacity for Virgin and other providers.

BT was given approval for a £12.5 billion takeover of EE by the UK's Competition and Markets Authority last month. The CMA had carried out an in-depth investigation into the proposed deal.