Virgin Media - O2 £31bn mega merger cleared by competition watchdog

Virgin Media's £31bn mega-merger with telecoms firm O2 has been provisonally approved.

The Competition and Markets Authority (CMA) said its in-depth investigation found that the deal is unlikely to lead to any substantial lessening of competition in relation to the supply of wholesale services.

The CMA launched its probe amid concerns that Virgin and O2 could have an incentive to raise prices or reduce the quality of wholesale services to other network operators in the UK, or even withdraw them altogether, which could have ultimately led to a worse deal for retail consumers.

But in its provisional decision, the CMA said the merged company would face competition from other providers and would therefore need to remain competitive or risk losing wholesale customers.

Martin Coleman, CMA panel inquiry chairman, said: "Given the impact this deal could have in the UK, we needed to scrutinise this merger closely.

"A thorough analysis of the evidence gathered during our phase two investigation has shown that the deal is unlikely to lead to higher prices or a reduced quality of mobile services - meaning customers should continue to benefit from strong competition."

A spokesman for Virgin Media owner Liberty Global and Telefonica, which owns O2, said: "Liberty Global and Telefonica note the CMA's publication of its provisional findings as part of its review into the proposed merger of their UK businesses.

"We continue to work constructively with the CMA to achieve a positive outcome and continue to expect closing around the middle of this year."

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