CMA gives Virgin and O2 merger green light

first_imgCMA gives Virgin and O2 merger green light Both Virgin and O2 sell wholesale services to a number of mobile operators in the UK. Virgin supplies wholesale leased lines to mobile operators and O2 provides its mobile network to companies that do not have their own.The CMA was initially concerned that, following the merger, Virgin and O2 could raise prices or reduce the quality of these wholesale services. If this were to happen, it could lead to other companies being forced to offer lower quality mobile services or increase their retail prices which would negatively impact consumers.The merger was referred to a group of independent CMA Panel members for an in-depth Phase 2 investigation. The Group has concluded that the deal is unlikely to lead to any substantial lessening of competition for a number of reasons:The costs of leased lines are only a relatively small element of rival mobile companies’ overall costs, so it is 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, including BT Openreach – which has a much greater geographical reach than Virgin – and other smaller providers. This means the merged company will still need to maintain the competitiveness of its service or risk losing wholesale custom.As with leased-line services, there are a number of other companies that provide mobile networks for telecoms firms to use, meaning O2 will need to keep its service competitive with its wholesale rivals in order to maintain this business.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. /Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here. Why?Well, unlike many news organisations, we have no sponsors, no corporate or ideological interests. We don’t put up a paywall – we believe in free access to information of public interest. Media ownership in Australia is one of the most concentrated in the world (Learn more). Since the trend of consolidation is and has historically been upward, fewer and fewer individuals or organizations control increasing shares of the mass media in our country. According to independent assessment, about 98% of the media sector is held by three conglomerates. This tendency is not only totally unacceptable, but also to a degree frightening). Learn more hereWe endeavour to provide the community with real-time access to true unfiltered news firsthand from primary sources. It is a bumpy road with all sorties of difficulties. We can only achieve this goal together. Our website is open to any citizen journalists and organizations who want to contribute, publish high-quality insights or send media releases to improve public access to impartial information. You and we have the right to know, learn, read, hear what and how we deem appropriate.Your support is greatly appreciated. All donations are kept completely private and confidential.Thank you in advance!Tags:business, communications, deal, Government, Impact, investigation, market, mobile, mobile network, quality, UK, UK Government, wholesalelast_img read more