Cable operator Virgin Media (Liberty Global) has today spoken out in favour of the proposed £10.25bn merger between mobile operators Three UK (CK Hutchison Holdings) and O2 (Telefonica), with the provider adding that “any competition concerns can be addressed without blocking [the deal]“.
The response came in stark contrast to Ofcom’s CEO, Sharon White, who earlier this week made her objections open for all to see by warning that fewer mobile operators would result in less competition, higher prices for consumers and greater complexity in network sharing arrangements (here).
Since then Three UK’s parent has committed to a number of promises in order to balance against Ofcom’s concern, such as highlighting a plan for £5bn worth of network investment and a pledge not to raise prices for the next 5 years (here). However it will take more than that to convince the European Commission, which will have the final say.
Now the merger has won additional support from Virgin Media, which incidentally also gave mild support to the prior merger between BT and EE. In the latter case Virgin argued that the EE deal should mean that BT is big enough to take on all of the responsibility for the Government’s proposed 10Mbps Universal Service Obligation (USO) for broadband. Naturally.
Tom Mockridge, Virgin Media CEO, 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.
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.”
Those in favour of the Three UK and O2 merger also argue that it could improve network coverage and would help the operator to compete with BT’s new behemoth.
Comments are closed