The UK Competition and Markets Authority (CMA) planned a second-stage investigation of the proposed tie-up of cable company Virgin Media and operator O2 UK, citing concerns regarding the impact on the wholesale and consumer sectors.
In a statement, the CMA noted the move to a second-stage probe had been fast-tracked at the request of the two companies, a process allowed where there is an obvious case for a wider investigation from an early point in its initial assessment.
The authority, which was granted control of the decision by the European Commission last month, said it was concerned the combination of assets owned by Liberty Global’s Virgin Media and Telefonica’s O2 UK could ultimately “to a worse deal for UK consumers”.
Its main concern is the fact the brands provided wholesale and backhaul services to other mobile operators and, following the merger, “may have an incentive to raise prices or reduce the quality of these wholesale services”.
The combination of the businesses was announced in May.
At the time the operators offered a range of pledges around investment in infrastructure and increasing competition in the converged communications sector.
The probe will be conducted by an independent CMA panel, who will set out the specifics of their investigation in “the coming weeks”.
A provisional timeline for the probe is yet to be announced, though Telefonica and Liberty Global had hoped to complete the deal in H1 2021.