The Leading News & Information Service For The Facilities, Workplace & Built Environment Community

Saturday, 7 December

3 into O2 Won't Go

The European Commission has blocked the proposed acquisition of O2 by 3 (aka Hutchison Whampoa) under the EU Merger regulation and shocked the parties involved.

What were termed ‘strong concerns’ that UK mobile customers would have had less choice and paid higher prices as a result of the takeover and that the deal would have harmed innovation in the mobile sector appeared behind the decision by the EC.

Commissioner Margrethe Vestager, saw the takeover as removing an important competitor with a consequent reduction of competition in the market that could have resulted in higher prices for mobile services in the UK and less choice for consumers than without the deal. There was also the belief that the takeover would have had a ‘negative impact’ on quality of service for UK consumers by hampering the development of mobile network infrastructure in the UK. Finally, the takeover would have reduced the number of mobile network operators willing to host other mobile operators on their networks.

Remedies proposed by Hutchison were deemed to have failed to adequately address the serious concerns raised by the takeover. “We want the mobile telecoms sector to be competitive, so that consumers can enjoy innovative mobile services at fair prices and high network quality,” argued Ms Vestager. “The goal of EU merger control is to ensure that tie-ups do not weaken competition at the expense of consumers and businesses. Allowing Hutchison to take over O2 at the terms they proposed would have been bad for UK consumers and bad for the UK mobile sector.”

 

UK mobile market competitive

The EC sees the UK mobile as currently competitive with retail mobile prices among the lowest in the entire EU. The UK is also seen as one of the most advanced countries in the EU in terms of introducing 4G technology and take-up of 4G services. The future development of the entire UK mobile network infrastructure being hampered was another concern expressed by the EC. In its statement, the EC observed ‘the merged entity would have been part of both network sharing arrangements, MBNL and Beacon. It would have had a full overview of the network plans of both remaining competitors, Vodafone and EE. Its role in both networks would have weakened EE and Vodafone and hampered the future development of mobile infrastructure in the UK, e.g. with respect to the roll-out of next generation technology (5G), to the detriment of UK consumers and businesses.’

 

Legal challenge considered

Not surprisingly, the reaction by CK Hutchinson, owner of Three UK has been swift and expressed frustration at the EC. A statement from the firm said: ‘We are deeply disappointed by the Commission’s decision to prohibit the merger between Three UK and 02 UK. We will study the Commission’s Decision in detail and will be considering our options, including the possibility of a legal challenge. We strongly believe that the merger would have brought major benefits to the UK, not only by unlocking £10 billion of private sector investment in the UK’s digital infrastructure but also by addressing the country’s coverage issues, enhancing network capacity, speeds and price competition for consumers and businesses across the country and dealing with the competition issues arising from the current significant imbalance in spectrum ownership between the UK’s MNOs.’

Picture: Behind the smile – a steely resolve by EC Commissioner Margrethe Vestager has seen a block put on the proposed merger between Three UK and 02

 

Article written by Mike Gannon

Share



Related Articles

Roaming Gets Cheaper

UK consumers are better off in the EU as roaming charges (in the evening and the daytime) are down to near zero Since the beginning of May, British mobile phone users...

 Read Full Article
Three into Two Shouldn’t Go

The Competition and Markets Authority (CMA) has expressed ‘serious concerns’ regarding the proposed merger between Hutchison 3G UK and Telefonica UK (O2)....

 Read Full Article
Andromeda Strained - International Cyber Op Dismantles Botnet

On November 29, the Federal Bureau of Investigation, in close cooperation with the Luneburg Central Criminal Investigation Inspectorate in Germany, Europol’s...

 Read Full Article
If Dolly Can Be Hacked, What About The Hand Dryer?

  Connected toys with Bluetooth, wi-fi and mobile apps may seem like the perfect gift for Christmas. But Which? has found that, without appropriate safety...

 Read Full Article
About Time For That AI Conversation

“The time is ripe, even overdue, to take a cold, hard look at what a highly disruptive technology could do to the industry.” So says the latest...

 Read Full Article
Squaring It With Qube

MRI Software has acquired Qube Global Software, a UK based provider of property and facilities management Solutions. The acquisition, according to MRI, extends the...

 Read Full Article
Yahoo Cyber Breach Was Bigger

Yahoo has announced (week ending Oct 6) that it is providing notice to additional user accounts affected by an August 2013 data theft previously disclosed by the company...

 Read Full Article
Innovation Boosts FM Market in 2017

A new report on the UK facilities management market has found a softening of growth in outsourcing demand as Brexit jitters continue, though forecasts remain above GDP...

 Read Full Article
FTSE 350 - General Data Protection Awareness Good

The Government will soon be introducing its new Data Protection Bill to Parliament. With this almost certain to come into effect next May, implementing the General Data...

 Read Full Article
FTSE 350 Cyber Governance Health Check

Britain’s top firms and charities urgently need to do more to protect themselves from online threats, according to new Government research and a ‘cyber health...

 Read Full Article