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Virgin Media calls on Commission to allow O2, Three merger

Virgin Media has called for the European Commission to allow CK Hutchison, owner of the Three mobile network, to buy O2.05 Feb 2016

CK Hutchison pledged this week to open its network to competitors in response to competition concerns, as well as to impose a price freeze for Three and O2 customers.

Tom Mockridge, chief executive of Virgin Media said in a blog post that that this would provide more capacity for Virgin and other providers.

"Any competition concerns can be addressed without blocking the proposed O2-Three transaction," Mockridge said.

"The Commission has previously cleared mobile mergers which resulted in a reduction in the number of mobile operators from four to three, subject to wholesale remedies. In two of these cases, Austria and Ireland, Virgin Media's parent company Liberty Global provides vigorous competition and consumer choice as a result of taking EU remedies," he said.

"The same can be true in the UK. A combined O2-Three could have more to offer consumers and, crucially, more capacity for other providers who want to drive competition in their own right. With the right remedies, this deal could stimulate, not curb, competition," Mockridge said.

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.

Competition expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com said: "Virgin Media’s comments will undoubtedly help the merging parties in their efforts to persuade the European Commission to allow the deal subject to certain conditions."

"However, the Commission’s track record of investigating four to three mergers in the mobile telecoms sector means that O2 and Three still face a tough challenge in Brussels," he said.