Hutchison ups the ante with final Three/O2 remedies

Hutchison ups the ante with final Three/O2 remedies

Three UK owners CK Hutchison has put forward a final set of remedies in a bid to win regulatory approval for is takeover of O2.

Hutch released its third set of concessions, which would see Virgin Media take 10 percent of a combined O2/Three, while Sky would claim a fifth of the network, the Financial Times reported.

The business previously put Sky and Tesco Mobile forward as potential candidates for any spectrum it could be forced to give up. Hutch pledged to sell the O2 owned share of Tesco Mobile and give the MVNO 10% network capacity.

The Three UK owners also offered a deal to Dixons Carphone in a bid to ease their concerns about losing a potential retail partner. It remains unclear what any deal would involve.

This is the latest in a number of remedies put forward by Hutchison in a bid to convince the European Commission to allow the takeover, ahead of its 19May deadline. The company made a number of public pledges, including a UK price freeze and divesting 30% of its spectrum to its rivals.

Industry hits back

Hutchison’s previous remedies came under fire from industry figures, which said the company could seek to lock small MVNOs out of the wholesale market.

Documents seen by Mobile revealed that buyers of spectrum from CK Hutchison would be sealed into a deal for 10 years. Vivian Woodall, CEO of The Phone Coop, claimed this could allow Three to pass on costs, giving the network no incentive to stop the new player going bust.

The Federation of Communications Services (FCS) publically condemned this move. CEO Chris Pateman stated it would be impossible for smaller players to stay in the market.

‘The European Commission seems to think that mobile services can only be delivered by huge organisations,’ he said. ‘Why do you have to be of a certain scale to deliver profitable value-added services to a niche of customers? All you need is access to spectrum and competitive prices – and while they [the EC] continue to presume otherwise, smaller players will be excluded from market growth.’


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