The CMA as given its provisional backing to the merger of Liberty Global’s Virgin Media with Telefonica’s O2.
The CMA inquiry group has concluded the deal is unlikely to lead to any substantial lessening of competition.
Potential issues included backhaul costs that are seen as a relatively small element of rival mobile companies’ overall costs, making it unlikely Virgin would be able to raise backhaul fees in a manner that might lead to higher charges to consumers. In leased-lines there are other players in the market, not least BT Openreach, which has a much greater geographical reach than Virgin.
“Given the impact this deal could have in the UK, we needed to scrutinise this merger closely,” explained Martin Coleman, CMA Panel Inquiry Chair.
“A thorough analysis of the evidence gathered during our phase 2 investigation has shown that the deal is unlikely to lead to higher prices or a reduced quality of mobile services – meaning customers should continue to benefit from strong competition.”
In response a spokesperson for Liberty Global and Telefonica said: “Liberty Global and Telefónica note the CMA’s publication of its provisional findings as part of its review into the proposed merger of their UK businesses. We continue to work constructively with the CMA to achieve a positive outcome and continue to expect closing around the middle of this year.”