UK competition authority asks for rights to probe O2/Virgin merger | Major Businesses | Business
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In a blow to the proposed deal that could alter radically the UK’s broadband and pay-TV industries, the UK’s Competition and Markets Authority (CMA) has made a request to the European Commission (EC) to refer to it for investigation the proposed joint venture between Liberty Global plc and Telefónica to merge Virgin Media/Virgin Mobile and O2.
VirginMedia network 25March2020
The 50-50 joint venture was announced in May 2020 and if it goes ahead, expected to close around the middle of 2021 subject to regulatory approvals and other conditions, will create what the partners say will be the UK’s leading fixed-mobile provider.

The combination of Virgin Media and O2 will create a nationwide integrated communications provider with over 46 million video, broadband and mobile subscribers and an estimated £11 billion of revenue. It comprises O2's core network of mobile users as well as those from mobile virtual network operators (MVNOs) Giffgaff, Sky Mobile, Tesco Mobile and Lycamobile along with the Virgin cable network which is rapidly being upgraded for gigabit broadband. Crucially it will add to the gigabit broadband O2’s expanding 5G network which the mobile operator says will have a transformative effect on the UK’s live entertainment industry, potentially to the tune of £2.3 billion over the next ten years.

The proposed merger falls under the remit of the EC to review but can, subject to the agreement of the EC, be transferred to the CMA. Yet the CMA believes that the case should be transferred given its potential impact on competition in several retail and wholesale telecommunication markets in the UK. It adds that the legal requirements for the case to be transferred have been met, and any impact on competition will be limited solely to UK consumers.

“We’ve sent a formal request to the European Commission to review the proposed deal between Virgin and O2,” said CMA Chief Executive Andrea Coscelli. “Ultimately, this is a decision for the EC, but as the merger will only impact UK consumers – and any effects would only be felt after the end of the transition period – it is only right for the CMA to request it back. While the EC has previously highlighted its strong interest in ensuring consistency across different merger cases in the telecommunications sector, the CMA believes that this is not relevant in this case given the imminent end of the transition period following the UK’s exit from the EU.”