Three Ireland to respond to EU concerns
Hutchison Whampoa’s subsidiary Three Ireland has announced that it will put forward a strong case addressing the European Commission’s concerns regarding its $1 billion bid for O2 Ireland.
The company received a “statement of objections” from the European Commission about its acquisition of Telefonica’s O2 Ireland last week, following a formal investigation into the deal which opened two months ago.
The EU is concerned that the deal – which will merge the two companies – will shrink competition, as it reduces the number of operators in Ireland down to three.
A spokesman from Three said that the company “is confident that it can convince the Commission of the pro-competitive benefits of the proposed acquisition”.
Three argues that the Irish mobile market would benefit from the merger, which would decrease the gap that exists between dominant player Vodafone and the other three operators, who are lagging behind.
“Competition in Ireland will be better served by three credible operators with sufficient scale to compete for a total market of 4.6 million than by the current market structure,” a spokesman for Three said. “The acquisition of O2 Ireland will provide Three with the scale and financial strength necessary to compete aggressively in the market, to the benefit of Irish consumers. It will give Three the means to challenge the number one player in the Irish market by rolling out a state-of-the-art 4G/LTE network and providing the best value and service to its customers.”
Three Ireland is likely to make concessions in order to secure regulatory approval. These could include providing assurances on existing network-sharing agreements, or reducing the combined group’s share of 4G spectrum.
The EU has until April 24 2014 to rule on the Hutchison bid. This ruling is indicative of whether the European Commission will allow deals which reduce the number of players in a national market.