CK Hutchison is due to meet the European Commission (EC) next week as part of its ongoing and intensive efforts to convince regulators that its planned acquisition of O2 UK will not be detrimental to competition on the UK mobile market.
Citing unnamed sources, Reuters said the closed-door meeting will take place on Mar. 7 and would also be attended by Sky, Virgin Media, TalkTalk, Vodafone and BT. As things stand, the EC has until Apr. 22 to reach a decision on whether or not to allow the proposed £10.25 billion (€13 billion/$14.3 billion) deal to go ahead.
Hong Kong-based Hutchison plans to buy O2 UK from Telefonica and merge it with Three UK to create a new mobile powerhouse. Although the proposed deal has received support from some quarters, including the CEO of Virgin Media, Tom Mockridge, others have been fiercely opposed to the idea of reducing the number of mobile network operators from four to three. Opponents to the deal include Sharon White, the CEO of UK regulator Ofcom.
Hutchison has already made some promises that it hopes will help overcome some of the biggest objections to the planned merger. For example, it has reportedly said it would work with rivals to maintain the two network-sharing arrangements in the market -- one between O2 UK and Vodafone UK, and the other between EE and Three UK.
It also pledged a price freeze on mobile services for five years and said it would invest £5 billion in the combined business over the same period. It also promised to sell off some of its network capacity to allow other competitors to enter the market.
Analyst Keith Mallinson, founder of consultancy WiseHarbor and a columnist for FierceWireless:Europe, recently wrote that the Three/O2 merger could produce a dynamic marketplace, and warned that "interventionists" such as the EC and Ofcom are failing to recognise the new and expanding ways that innovation and competition may occur.
Meanwhile, the CEO of O2 UK, Ronan Dunne, said in an interview with Mobile World Live at Mobile World Congress last week that there was a good case for a "standalone mobile champion" in the UK. Indeed, he argued that a mobile-focused player would be "essential" to ensure that consumers have "real choice", as other UK operators such as a combined BT and EE increasingly adopt convergence strategies.
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