Telefonica/Vodafone UK network merger given OFT approval

1 Oct 2012

The UK’s Office of Fair Trading (OFT) has cleared the proposed joint venture between the local subsidiaries of Spain’s Telefonica and mobile giant Vodafone Group under which the pair will strengthen their network partnership.

As noted in TeleGeography’s GlobalComms Database, June 2012 saw the announcement that the two groups’ subsidiaries – O2 UK and Vodafone UK – would jointly operate and manage a single network grid running two competing mobile voice and internet networks, with both retaining complete control over their own wireless spectrum, intelligent core networks and customer data. In order to facilitate the project, a new 50/50 joint venture company is to be created via the consolidation of the existing basic network infrastructure of each cellco, including towers and masts; upon completion both operators should have access to a single grid comprising around 18,500 masts, a figure that reportedly represents an increase of more than 40% for each of them. In terms of the design, management and maintenance of the radio equipment and local transmission, Vodafone and O2 will each take responsibility for one half of the country; O2 will manage and maintain these elements in the East (including Northern Ireland and most of Scotland), while Vodafone will look after the West (including Wales). It was also confirmed that all shared sites will continue to carry O2’s traffic on O2’s spectrum and Vodafone’s traffic on Vodafone’s spectrum. Indeed, both operators will continue to remain responsible for their own existing spectrum holdings and for fulfilling their own spectrum needs in the future.

In the latest development in the matter, the International Business Times reports that, with the OFT having opted to examine the proposal rather than refer it to the European Commission, the watchdog has cleared the plans after finding that the tie-up would lead to ‘no substantial lessening of competition’.

United Kingdom, O2 UK, Telefonica, Vodafone Group, Vodafone UK