CMA gives O2-Virgin merger final approval

20 May 2021

The UK’s Competition and Markets Authority (CMA) has given its final approval for the proposed merger of O2 UK and Virgin Media, having last month granted provisional clearance for the deal. In a press release confirming its decision, the CMA noted that – having referred the proposed tie-up to a group of independent CMA Panel members for an in-depth Phase 2 investigation – it has now concluded the deal is unlikely to lead to any substantial lessening of competition for several reasons, specifically: the costs of leased lines are only a relatively small element of rival mobile companies’ overall costs, making it unlikely that Virgin would be able to raise leased-line costs in a way that would lead to higher charges for consumers; there are other players in the market offering the same leased-line services, meaning the merged company will still need to maintain the competitiveness of its service or risk losing wholesale custom; and that, as with leased-line services, there are several other companies providing mobile networks for telecoms firms to use, meaning O2 would need to keep its service competitive with its wholesale rivals in order to maintain this business.

Commenting on the final ruling, Martin Coleman, CMA Panel Inquiry Chair, said: ‘O2 and Virgin are important suppliers of services to other companies who serve millions of consumers. It was important to make sure that this merger would not leave these people worse off. That’s why we conducted an in-depth investigation … After looking closely at the deal, we are reassured that competition amongst mobile communications providers will remain strong and it is therefore unlikely that the merger would lead to higher prices or lower quality services.’

United Kingdom, O2 UK, Virgin Media