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March 6, 2015

UK watchdog battles Brussels over O2 take-over

CMA argues it is best placed to oversee Hutchinson Whampoa acquisition.

By Alexander Sword

The Competition and Markets Authority is battling to ensure that Hutchinson Whampoa’s take-over of O2 is scrutinised by regulators in the UK rather than Brussels.

Officials from the CMA have approached the Government and European regulators to argue that UK regulators are best-placed to oversee the £10 billion deal, according to Sky News.

Generally, cross-border deals of this size are examined by Brussels regulators unless at least two-thirds of the business of both parties are conducted in the state in question.

The CMA has applied for an exception to this trend, due to the importance of the deal, which would reduce the number of big mobile operators in the UK from four to three.

The upcoming move, which was announced by Hutchinon Whampoa in January, would see the Three owner purchasing the UK’s second-biggest network from Telefónica. The new conglomerate would leapfrog EE to become the UK’s biggest operator.

However, while the number of operators is consolidating, Charlotte Patrick, Research Director at Gartner believes that should the buy-out go ahead, the market will be left "relatively stable".

"We’re not really changing the shape (of the market)," she commented to CBR. She argues that with only around 10 percent of the mobile market, Three was never really in the top league of operators, meaning that the number of big players will remain the same.

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