Vodafone UK and MVNO Sky Mobile raised concerns related to a proposed Virgin Media merger with O2 UK, arguing the £31 billion tie-up could heavily impact competition.
The companies highlighted various concerns in separate submissions to the Competition and Markets Authority (CMA).
Vodafone argued the planned merger “will lead to a substantial lessening on competition in UK telecoms markets”, because the “vertically-integrated merged entity, with its network ownership economics in both fixed and mobile and cross-selling opportunities, would have both the incentive and ability to foreclose competition” from rivals.
It highlighted concerns related to the supply of passive fibre leased lines for the provision of mobile backhaul, and the impact to the MVNO market and retail competition.
Sky Mobile also focused on potential harm to the MVNO sector. The operator uses O2’s network and stated the host would have less incentive to provide mobile services on favourable terms.
It noted the merged business would pursue “increased uptake of fixed/mobile bundles benefitting from its converged and vertically integrated operations”, and highlighted an ability for the new company to downgrade its mobile service.
Vodafone explained it supported a CMA decision to deepen its investigation into the deal.
The watchdog has concerns about a potential negative impact on UK consumers and wholesale services.
A timeline to compete the probe is yet to be announced, but O2 and Virgin Media have said they expect the deal to close in H1.
Virgin Media and O2’s parent companies announced the deal in May 2020.Subscribe to our daily newsletter Back