The European Commission has blocked the proposed merger of Telefonica UK’s O2 network with Hutchison’s Three, saying it was concerned that the deal would have harmed innovation, reduced consumer choice and caused prices to rise.
A combined O2/Three network would have been part of the current MBNL and Beacon network sharing arrangements, giving it access to the network plans of both Vodafone and EE.
Margrethe Vestager, the European Commissioner in charge of competition policy, said "We want the mobile telecoms sector to be competitive, so that consumers can enjoy innovative mobile services at fair prices and high network quality. The goal of EU merger control is to ensure that tie-ups do not weaken competition at the expense of consumers and businesses. Allowing Hutchison to takeover O2 at the terms they proposed would have been bad for UK consumers and bad for the UK mobile sector. We had strong concerns that consumers would have had less choice finding a mobile package that suits their needs and paid more than without the deal. It would also have hampered innovation and the development of network infrastructure in the UK, which is a serious concern especially for fast moving markets. The remedies offered by Hutchison were not sufficient to prevent this."
The EC investigation into the proposed acquisition of Telefonica UK by Hutchison was opened in October last year.