×

U.K. Antitrust Body Requests Right to Investigate Proposed Merger of Virgin Media, Virgin Mobile and O2

U.K. Antitrust Body Asks to Investigate
Courtesy of Liberty Global/Telefonica

U.K. antitrust organization the Competition and Markets Authority has submitted a request to the European Commission for the proposed merger in the U.K. of broadband and mobile-phone operators Virgin Media and Virgin Mobile with cell-phone company O2 to be referred to the CMA for investigation.

The European Commission was notified about the proposed merger by Liberty Global, which owns Virgin Media and Virgin Mobile, and Telefónica, which owns O2 on Sept. 30.

The proposed merger falls under the remit of the EC to review but can, subject to the agreement of the EC, be transferred to the CMA.

The CMA believes that the case should be transferred given its potential impact on competition in several retail and wholesale telecommunication markets in the U.K.

CMA said Thursday that the legal requirements for the case to be transferred to the CMA have been met, and any impact on competition will be limited solely to U.K. consumers.

Andrea Coscelli, chief executive at the CMA, said: “We’ve 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 as the merger will only impact U.K. consumers – and any effects would only be felt after the end of the transition period (after which the U.K. leaves the EU) – it is only right for the CMA to request it back.”

The initial deadline for the EC to respond to the request is Nov. 19.

Regarding the CMA’s request, a representative of Liberty Global and Telefonica told Variety: “Last week we formally requested the European Commission to approve the merger of Virgin Media and O2. We have kept the U.K. CMA and Ofcom fully informed and engaged throughout this process. We firmly believe this is a pro-competitive transaction that will bring substantial benefits to UK consumers and should be swiftly approved. We have made a compelling case to enable the European Commission to clear the transaction as soon as possible. Transferring the case to the CMA will delay this process and our ability to press on with improving the U.K.’s broadband and 5G infrastructure, whilst creating new jobs in the U.K.”

The merger would bring together a company with 46 million video, broadband and mobile subscribers, including 3.7 million pay-TV subscribers, 5.3 million broadband customers, 4.6 million fixed-line voice subscribers, and 32 million mobile subscribers. The combined revenue of the businesses would be £11 billion ($14.2 billion).

Telefonica CEO Jose Maria Alvarez-Pallete said when the deal was proposed: “Combining O2’s number one mobile business with Virgin Media’s superfast broadband network and entertainment services will be a game-changer in the U.K., at a time when demand for connectivity has never been greater or more critical. We are creating a strong competitor with significant scale and financial strength to invest in U.K. digital infrastructure and give millions of consumer, business and public sector customers more choice and value.”

Mike Fries, CEO of Liberty Global, said: “Virgin Media has redefined broadband and entertainment in the U.K. with lightning fast speeds and the most innovative video platform. And O2 is widely recognized as the most reliable and admired mobile operator in the U.K., 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.