Decision on takeover deal between 3 Ireland and O2 expected today

A decision on the proposed takeover by Hutchison Whampoa-owned 3 Ireland of its rival O2 Ireland is expected to be revealed today.

The deal, which has been in the works since June last year when 3 Ireland agreed to buy its rival for up to €850 million, is thought to have been backed by a key EU panel last week, clearing the way for the European Commission to clear the acquisition.

If it is approved as expected, it will make the combined business the second largest mobile operator in Ireland, beaten only by Vodafone.

Regulators have sought a number of concessions from 3 Ireland before the deal could be approved, with the European Commission outlining its concerns in February in a letter to the firms.

Among the main concerns said to be expressed were the reduction in competition as the number of network owners in the Irish market was reduced to three, the amount of spectrum the merged company would hold relative to its rivals, the continuation of network sharing arrangements currently in place, and the possibility of mobile virtual network operators (MVNO) accessing its infrastructure to provide services.

Three has already offered network access to UPC to allow the company to provide mobile services to its customers in Ireland as an MVNO. Under such a deal, operators can launch their own mobile network brands by paying to use the services already in place with one of the existing networks. The company also promised to help set up a new mobile network operator, by offering UPC the option of acquiring a ready-made customer base of up to 75,000 users from the merger.

Rival Eircom, meanwhile, is set to benefit from an agreement to offload some of 3 ireland's spectrum to its mobile unit Meteor, and from the retention of a network-sharing agreement currently in place with O2. The spectrum under discussion was auctioned off in November 2012 by Comreg, with 3 Ireland and O2 owning three blocks of 900 MHz spectrum and seven blocks of 1800MHz spectrum between them.

Without the approval of the merger, parent company Hutchison Whampoa had warned that its Irish arm would not be able to grow enough to make the firm profitable. The subsidiary had reported nine years of losses, with a pretax loss last year of €29 million.