News
Commission reportedly still keen to facilitate entry of new mobile operator.
In a bid to win European Commission approval for its acquisition of O2 UK, 3UK parent CK Hutchison has offered to allocate as much as a third of the merged company’s network capacity to a rival.
Sources cited in a Financial Times report late on Monday said that Hutchison sees its proposal to share its network as a more credible concession than facilitating the creation of a new, fully-fledged mobile operator due to the amount of investment required to build a new network.
The capacity would be offered on a permanent basis, which Hutchison claims is more attractive than a short-term MVNO agreement.
Several parties are allegedly interested, including Sky. Hutch may allocate capacity to a single rival or divide it up among multiple players.
However, the FT’s sources said the European Commission, which is in the midst of an in-depth investigation into the 3UK/O2 merger, is concerned that consolidation will lead to higher prices, and therefore it would prefer to impose remedies that would see a new fourth player emerge.
Indeed, U.K. telco watchdog Ofcom warned on Tuesday that prices will rise as a result of the 3UK/O2 merger.
Meanwhile, it emerged last week that 3UK has also offered to sell O2’s 50% stake in Tesco Mobile, an MVNO joint venture between O2 and supermarket Tesco.
Tesco confirmed that it is an "interested party" in the merger review process.
