Three proposes new network operator in O2 takeover plan

Friday 21 March 2014 08.12
Hutchison's offer to EU regulators would cede spectrum and network access to a 'mobile virtual network operator'
Hutchison's offer to EU regulators would cede spectrum and network access to a 'mobile virtual network operator'

Three Ireland's owner Hutchison Whampoa is offering to help a smaller rival become Ireland's fourth mobile operator in a bid to win European Union approval for its acquisition of O2 Ireland.

This is according to two people familiar with the matter, reports the Bloomberg financial news agency. 

Hutchison's offer to EU regulators would cede spectrum and network access to a so-called mobile virtual network operator, the sources said. 

The offer would enable the competitor to move from piggybacking on others' services to running its own infrastructure within three years, the people said.

Concessions by billionaire Li Ka-Shing's Hutchison are designed to overcome EU objections to the combination of two of Ireland's four mobile operators that currently run their own networks. 

O2's Spanish owner Telefonica's separate plans to merge its German unit with Royal KPN's E-Plus is another tie-up that is testing how far regulators are willing to allow consolidation in the telecommunications industry. 

Joaquin Almunia, the EU's competition chief, has said such deals can not come at the expense of higher prices for consumers. 

"Three Ireland can confirm that they have submitted remedies and that these have been sent to interested parties for market testing," Three Ireland said in a statement. 

"We hope to reach final agreement with the Commission and gain clearance of the acquisition as soon as possible," it added. 

Hutchison will not give wireless spectrum to Vodafone, the country's biggest mobile phone group or to Eircom. 

It will maintain an existing network-share agreement with Eircom allowing both companies to share buildings that host mobile masts and broadcasting equipment. A new smaller competitor would share Hutchison's network in urban areas and have a roaming pact to use its services in rural areas. 

Hutchison held talks with Liberty Global's UPC to allow it become a virtual operator buying wholesale access from Hutchison's network to sell phone services to customers, three people said earlier this month.