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EU blocks Three's takeover of O2 as it would be 'bad for UK mobile sector'

12/05/2016 by Stuart Wilson


The European Commission has blocked CK Hutchison, the owner of UK telecoms firm Three, in its £10.5 billion attempt to buy O2, on the grounds that it would have led to less choice and higher prices for UK consumers.

The news won't come as a surprise to many, with both UK telecoms regulator, Ofcom, and the EU's competition chief, Margrethe Vestager vocal in their concerns and what one less operator in the market would mean for consumers in terms of prices.

The block marks the first time that the commission has formally ruled against a telecoms merger in a major European market – a fact that could see Hutchison seek legal action in a bid to have the decision overturned.

It will also have history on its side, with similar deals having been passed before by the commission. However, it only has until the second quarter of 2016 to strike a deal.

The company said: "We are deeply disappointed by the commission's decision to prohibit the merger between Three UK and O2 UK. We will study the commission's decision in detail and will be considering our options, including the possibility of a legal challenge."

Discussing Hutchinson's attempts to persuade the European competition watchdog to green light the merger by signing deals with Virgin and Sky that would have guaranteed space on its expanded mobile network, Vestager said that the "remedies" were "not sufficient".

Vestager's decision is likely to have wider implications for the European telecoms industry going forward, with Hutchison's joint venture with VimpelCom in Italy also the subject of a commission investigation.


UK, telecoms, Telecom, Three, O2, Ofcom, EU

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