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Three Into O2

EU approves Three takeover of O2, but ComReg is concerned

The deal brings Three’s market share to 37%, but ComReg isn’t sure it’s a good deal for the industry.

THE EUROPEAN COMMISSION has approved a deal that will see Three Ireland take over O2 Ireland – as long as Three makes efforts to aid smaller competitors.

The deal will take Three’s market share to 37 per cent and bring subscriber numbers to over 2 million active users, but ComReg, the body that oversees mobile networks in Ireland, says that the conditions don’t ensure competition in the industry.

The two companies had combined revenues of €736m in 2013, with Three’s accounting for €180m of that. Three, backed by Hutchison Whampoa, a Hong-Kong firm backed by Asia’s richest man, Li Ka-shing.

Hutchison has so far invested over €1.1 billion in the Three Irish business. This, together with the purchase of O2 Ireland and the planned investment of €300 million to build a 4G network over the next three years, will bring HWL’s total investment in Ireland to around €2 billion.

The deal had been mooted for some time, but concerns over competition had stalled it.

However, ComReg says that the EU conditions don’t go far enough.

“ComReg remains of the strong view that the behavioural commitments are insufficient to address the structural competition deficit identified as likely to result from the proposed acquisition.

“Nevertheless, ComReg welcomes the end to the uncertainty surrounding the acquisition and looks forward to the anticipated network investment.

As part of the EU approval process, Three has committed to provide network capacity and services to two operators in order to facilitate new MVNO entry into Ireland with the option to acquire spectrum that may be taken up by one or the other to become a network operator.

Three has also committed to offer to Eircom Meteor to continue its network sharing with O2 on improved terms with the merged network.

Robert Finnegan, CEO of Three said the deal “leaves Three optimally positioned to become the number one player by providing the best value and service to our customers.”

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