Class Economy Premium: London calls on Brussels not to approve the sale of O2 by Telefonica

Monday, February 1, 2016

London calls on Brussels not to approve the sale of O2 by Telefonica – EntornoInteligente

Expansion / The British regulator Ofcom believes that the integration of the Spanish subsidiary of the Hutchison group would “higher prices for consumers and businesses”.

Sharon White, chief executive of Ofcom, has written an article in the Financial Times in which he expressed serious objections to the agreed transfer of O2, Telefonica subsidiary, Hutchison Whampoa by 10,250 million pounds (13,500 million euros).

Three, owned by Hutchison, would become the leader of the British mobile market to absorb O2, overtaking the US (now part of BT Group) and Vodafone, with a share of 42%.

“The deal could mean higher prices for consumers and businesses,” said the head of Ofcom, an organization that has an advisory role in the analysis of the operation being conducted by the European Commission. According to White, countries have three major mobile operators, instead of four, have higher prices between 10% and 20% on average.

In addition, the head of Ofcom questioned the effect the binding of O2 and Three would have on the current network sharing between operators. Right now, O2 has a joint venture with Vodafone to group the signaling infrastructure, while Three has a similar agreement with the US. “A merger would threaten this scheme,” said White.

Finally, Ofcom believes that the new group would take too much power in the retail market by having a large number of stores in the country.

Implicitly, White rule out potential remedies for joining O2 and Three, as would rent part of their infrastructure to other companies or even selling some assets to a new operator. “Only four companies that have network can make mobile signals faster, reliable and more available. Establishing a new mobile network could be an answer, but this will take time and considerable investment.”

In the coming days, it is expected that the services of Competition of Brussels offer their first formal views on the sale of O2, and could be in line with the views of Ofcom. Then, Hutchison will have time to consider possible concessions or remedies to the problems. If these do not satisfy the Commission, it could impose tougher conditions or even veto the operation. The final opinion will be announced in April.

Telefonica has said that the delivery of cash dividend in 2016 depends largely agreed to enter the money from the sale of O2. As a possible alternative, the operator is studying to publicly list or sell a subsidiary that will group together part of their network infrastructures in various countries.

London Brussels asks not to approve the sale of O2 Telefonica

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http://entornointeligente.com/articulo/7807344/Londres-pide-a-Bruselas-que-no-apruebe-la-venta-de-O2-por-Telefonica