UK Watchdog Provisionally OKs Virgin Media/O2 Deal

The UK’s competition authority dismissed concerns that a merger of mobile operator O2 and fixed operator Virgin Media would have negative implications on wholesale services, provisionally clearing the proposed deal without conditions, reported the BBC.

In a statement, the Competition and Markets Authority (CMA) said its investigation concluded the combination of the businesses was unlikely to have a negative effect on either fixed or mobile wholesale markets.

Both Virgin and O2 provide some wholesale services to other mobile network operators in the UK, as well as retail services to consumers. The CMA noted that its investigation focused on whether the merger could lead to reduced competition in wholesale services as part of the review.

Virgin provides wholesale leased lines to mobile telecommunications companies, such as Vodafone and Three, which they use to connect key parts of their network. Similarly, O2 offers mobile operators such as Sky and Lycamobile, which do not have their own mobile network, use of the O2 network to provide their customers with mobile phone services.

The CMA stated that it was initially concerned that, following the merger, Virgin and O2 could raise prices or reduce the quality of these wholesale services. Having examined the evidence, the CMA has now provisionally concluded that the proposed merger is unlikely to lead to any substantial lessening of competition in relation to the supply of wholesale services.

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