UK watchdog provisionally clears Virgin Media, O2 merger
United Kingdom's Competition and Markets Authority (CMA) stated on Wednesday that it has given a provisional go-ahead of the merger between Telefonica S.A's service provider O2 and Liberty Global's Virgin Media.
According to the regulating body, there were fears that the merger "could lead to reduced competition in wholesale services," which include Virgin leasing lines to mobile telecommunication companies and O2 offering similar deals to operators that don't have their own mobile networks, and that the companies could reduce the quality of those services thus making their own offers more attractive. However, CMA has now "provisionally concluded that the deal is unlikely to lead to any substantial lessening of competition in relation to the supply of wholesale services."
Martin Coleman, CMA Panel Inquiry Chair, said: "Given the impact, this deal could have in the UK, we needed to scrutinize this merger closely. 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."