EU regulators set to clear Hutchison, O2 Ireland deal, say sources
Telefonica deal is one of three telecoms mergers being examined by European Commission
Billionaire Li Ka-shing, chairman of Hutchison Whampoa. The company wants to reinforce its position in Europe.
Hutchison Whampoa is set to gain regulatory clearance for its $1 billion bid for Telefonica’s Irish business as soon as it signs a separate deal aimed at creating a fourth mobile operator in Ireland, two people with knowledge of the matter said yesterday.
The Telefonica deal is one of three telecoms mergers being examined by the European Commission, the European Union’s competition watchdog, that will reshape the industry.
Hong Kong-based conglomerate Hutchison, controlled by Asia’s richest man, Li Ka-shing, wants to reinforce its position in Europe, where it operates in six countries. Buying Telefonica’s O2 Ireland will make it the second biggest mobile operator in the country behind Vodafone.
Hutchison is in the final stage of talks to help Liberty Global’s Irish business, UPC, which offers internet and cable TV services, become a mobile virtual network operator (MVNO) offering services over Hutchison’s network.
“Now it is just putting together all the details,” said one of the sources. The European Commission had demanded that Hutchison help create a fourth mobile player as the (Telefonica) deal would reduce the number of operators from four to three.
Hutchison will give up some of its capacity and sign a roaming agreement with UPC as part of the deal as the Irish business looks to become a standalone mobile operator in the future.
“It’s going to be step by step, helping UPC move from being an MVNO to become a mobile network operator,” the source said.
The other major concession includes continuing a network sharing agreement with Ireland’s third-biggest operator, Eircom subsidiary Meteor.
European Commission spokesman for competition policy Antoine Colombani and Hutchison Whampoa spokesman Neil McMillan declined to comment. The commission has set a June 20th deadline for its decision. – (Reuters)