EU Commission blocks sale of O2 UK to Three’s parent company Hutchingson Whampoa
As predicted by many in the industry, it was formally announced yesterday that Three cannot purchase O2 UK from Telefonica.
In a deal that was worth £10.3bn Hutchingson Whampoa, the Hong Kong based parent company of the UK Network Three proposed to obtain Telefonica’s UK Network O2 reducing the number of mobile providers to just three. It was this point in particular that the EU commission had qualms about; with Europe’s Competition Commissioner Margrethe Vestager ruling that it would result in a reduction in customer choice and potentially raised prices.
Explaining, Ms Vestager said;
“The goal of EU merger control is to ensure that tie-ups do not weaken competition at the expense of consumers and businesses, we want the mobile telecoms sector to be competitive so that consumers can enjoy innovative mobile services at fair prices and high network quality.”
O2 have maintained that customers have nothing to worry about and that the ruling will have no effect on their UK operations with a spokesperson stating;
“The O2 business has continued to perform well in the market whilst the Commission process has taken place. Our customers are our priority and we will continue to differentiate, compete fiercely and remain successful, long into the future.”