U.K. Antitrust Body Requests Right to Investigate Proposed Merger of Virgin Media, Virgin Mobile and O2
The British antitrust organization Competition and Markets Authority has submitted an application to the European Commission for a planned merger of the broadband and mobile network operators Virgin Media and Virgin Mobile with the mobile communications company O2 in Great Britain for investigation by the CMA.
The European Commission was informed on September 30th by Liberty Global, which owns Virgin Media and Virgin Mobile, and Telefónica, which owns O2, of the proposed merger.
The proposed merger falls within the remit of the EC for review, but can be transferred to the CMA, subject to EC approval.
The CMA believes that the case should be carried over due to its potential impact on competition in several retail and wholesale telecommunications markets in the UK.
CMA announced Thursday that the legal requirements for submitting the case to the CMA have been met and the impact on competition will be limited solely to UK consumers.
Andrea Coscelli, Managing Director of CMA, said: “We have sent a formal request to the European Commission to review the proposed deal between Virgin and O2.
"Ultimately, this is a decision for the EC, but since the merger will only affect UK consumers - and all effects will only be felt after the end of the transition period (after which the UK leaves the EU) - this is only right the CMA, to reclaim it. "
The first deadline for the EC to respond to the question is November 19th.
Regarding the CMA's request, a representative from Liberty Global and Telefonica told Variety, “Last week we officially asked the European Commission to approve the merger of Virgin Media and O2. We informed and engaged the UK CMA and Ofcom extensively during this process. We firmly believe this is an pro-competitive transaction that will bring significant benefits to UK consumers and should be approved quickly. We have put forward convincing arguments so that the European Commission can close the deal as quickly as possible. Transferring the case to the CMA will delay that process and our ability to further improve broadband and 5G infrastructure in the UK while creating new jobs in the UK. "
The merger would bring together a company with 46 million video, broadband and cellular subscribers, including 3.7 million pay-TV subscribers, 5.3 million broadband subscribers, 4.6 million landline voice subscribers and 32 million cellular subscribers. The combined sales of the companies would be £ 11 billion ($ 14.2 billion).
Jose Maria Alvarez-Pallete, CEO of Telefonica, said when the deal was proposed, “The combination of O2's leading wireless business with Virgin Media's ultra-fast broadband and entertainment services will come at a time in the UK where connectivity demand has never been was to play a decisive role larger or more critical. We are creating a strong competitor of considerable size and financial strength to invest in the UK digital infrastructure and bring choice and value to millions of consumer, corporate and public sector customers. "
Mike Fries, CEO of Liberty Global, said, “Virgin Media has redefined broadband and entertainment in the UK at lightning fast speeds and the most innovative video platform. And O2 is widely recognized as the UK's most trusted and admired cellular operator, always putting the customer first. With Virgin Media and O2 together, the future of convergence is here today. "
Pictured: Jose Maria Alvarez-Pallete and Mike Fries.
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