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UK Watchdog Probes O2-Virgin Deal Due To Prices

By  |  January 21, 2021

The UK competition watchdog is to investigate whether Virgin Media’s proposed £31bn tie-up with telecoms operator O2 could lead to higher prices for mobile and broadband customers or poorer 5G connectivity for rival operators, reported The Financial Times. 
Liberty Global and Telefónica, the respective owners of Virgin Media and O2, struck a deal to combine their UK operations in May last year with plans to combine the country’s second-largest broadband network and largest mobile operator. 
The CMA on Thursday highlighted two areas of potential harm that could be triggered by the merger including the impact on the market for “virtual” operators that use mobile networks such as O2’s to offer services to consumers.  O2 supplies operators such as Sky Mobile, Tesco Mobile and Lycamobile with access to its mobile network that enables them to offer own-brand services. 
The CMA said it was concerned that the merged group could reduce services to those operators, or raise the price it charges for that access, which could mean raised prices for consumers if the “virtual” services are withdrawn entirely as a result.

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