3 + O2 could equal problems

30 Jan 2014

Hutchison Whampoa is facing the prospect of having to make more concessions before it gains regulatory clearance for its proposed acquisition of Telefonica O2 Ireland. The Hong Kong-based firm currently owns the smallest of Ireland’s four cellular providers by subscribers, Hutchison 3G Ireland, which trades as ‘3’. In June last year it agreed a EUR780 million (USD1.1 billion) deal to acquire O2 Ireland from Telefonica of Spain, as the Spanish company looks to exit the Irish market to help reduce its sizeable debt pile. With O2 currently sitting in second place in the market, a merger with 3 would bring it almost level with market leader Vodafone – both firms claiming around 40% of the overall subscriber total – leaving third-placed firm Meteor well adrift with around 20% of users.

According to a report from CellularNews, European Union (EU) competition authorities, who are currently examining the deal, are expected to demand further concessions before approving the merger. These could include promises by 3 Ireland to maintain the terms of an existing network sharing agreement in place between O2 and Meteor, while the merged entity may also be required to divest some of its wireless spectrum assets. The EU has said it expects to make a final decision on the deal by the end of March.

Ireland, Hutchison 3G Ireland (Three Ireland), O2 Ireland