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Operators
May 12, 2016
Brussels ruling to prohibit CK Hutchison’s planned £10.25bn bid to create biggest UK mobile operator was “right outcome for customers”
The European Commission’s decision to block Three-owner CK Hutchison’s £10.25 billion bid to buy O2 was the “right outcome for mobile customers”, according to UK regulators.
Ofcom and the Competition and Markets Authority had both previously opposed the proposed merger, which spent a year under scrutiny from European watchdogs.
Yesterday (May 11), European Commissioner Margrethe Vestager ruled to block the deal, saying the UK mobile market could be harmed if the number of active operators fell from four to three.
The decision was praised by Ofcom. In a statement, the regulator said: “We believe this is the right outcome for mobile customers, who have always been our priority.
“Three and O2 are important and effective competitors in the UK, helping to deliver innovation, investment and competitive prices over many years. Competition must be sustainable, and regulation should support it. We will aim to do so through tools such as market reviews or auctions of mobile airwaves.”
The CMA consulted with the European Commission during the decision-making process, and, like Ofcom, it backed Vestager’s ruling.
A spokesperson for the CMA said: “We have worked closely with the EU Commission’s team on this case and it was our view that this merger could cause long term damage to the UK mobile phone market unless acceptable commitments were offered.
“Hutchison did not offer acceptable commitments and so, the only option available to the Commission was to block the merger. We believe that this decision will protect the interest of UK customers and ensure that they continue to benefit from a competitive market with four mobile network operators.”