Orange, T-Mobile UK offer merger concessions to EC
France Telecom and Deutsche Telecom have both agreed to relinquish part of their shared spectrum if the European Commission approves the merger of their UK operations.
The operators are willing to sell off up to 25% of their shared spectrum in the 1800 MHz band, and to enter an infrastructure sharing agreement with Hutchison Whampoa's 3 UK.
But rival UK mobile operators are privately concerned that the spectrum concession doesn't go far enough, sources told FT.com.
A merger between France Telecom's Orange UK and Deutsche Telecom's T-Mobile UK would create the UK's largest mobile operator, with 37% market share. This would compare to 27% for Telefonica's O2, and 25% for Vodafone UK.
The combined entity would have around 29.5 million customers, and without the concessions it would own most of the UK's 1800 MHz spectrum.
France Telecom and Deutsche Telecom are both hoping to receive merger approval from the EC by next month. They also hope to dissuade the EC from agreeing to a request from the UK's Office of Fair Trading (OFT) to take charge of the investigation.
The OFT has already stated that its preliminary view is that the merger would present competition concerns.
The Competition Commission has sent questionnaires to Vodafone, O2 and 3 UK, as well as BT's MVNO unit, seeking their thoughts on the potential merger, the WSJ said.
Submissions are due by the end of the week.