CK Hutchison takes legal action over EC 's decision to block O2 UK deal

Three UK CEO David Dyson has called for caps on spectrum allocations following CK Hutchison's failed O2 UK bid.

CK Hutchison launched legal action against the European Commission (EC) over its decision to block the Hong Kong-based company's proposed acquisition of O2 UK from Telefónica.

The move, which was first reported by the Telegraph on Friday, fulfils CK Hutchison's promise that it would consider the possibility of a legal challenge after the EC said in May that it opposed the company's plan to buy O2 UK and merge it with Three UK.

"CK Hutchison can confirm that it has lodged an appeal to the European General Court against the decision adopted by the European Commission on 11 May 2016 to prohibit CK Hutchison's acquisition of O2 UK," the company said in a statement emailed to FierceWireless:Europe.

The EC said at the time that it had 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.

It's not clear how CK Hutchison will address these concerns in its legal challenge. However, at the time of the decision it said it believed the merger would have brought major benefits to the UK by unlocking billions of pounds in private investment and addressing the country's coverage issues.

Should CK Hutchison win its legal challenge, a renewed attempt to buy O2 UK does not appear to be likely, however.

Since the deal collapsed, Telefónica has decided to retain O2 UK for now and reconsolidate the company into the group. In July, Mark Evans was appointed as the mobile operator's new CEO, replacing Ronan Dunne who is stepping down from the role.

As for Three UK, one of CK Hutchison's concerns is that the operator is in what CCS Insight described as a "precarious position" because of its more limited spectrum assets compared to rivals.

"The operator claims to carry over 40 per cent of UK data traffic, but holds only about a 15 per cent share of the airwaves -- an unsustainable position that has already forced Three to raise prices on some tariffs," CCS Insight observed.

Three UK CEO Dave Dyson has already called for regulator Ofcom to impose restrictions on rivals at an upcoming auction of 2.3 GHz and 3.4 GHz frequencies.

Dyson is seeking a 30 per cent spectrum cap on any operator following the auction.

Ofcom is planning to award 190 MHz of spectrum in the 2.3 GHz and 3.4 GHz bands. This forms part of the government's commitment to release 500 MHz of spectrum under 5 GHz from the public to the private sector by 2020.

For more:
- see this Telegraph article

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