EU to rule on O2 takeover next month

EU competition regulators will decide by June 20 whether to clear Hutchison Whampoa’s €700m offer for Telefonica’s 02 Ireland mobile phone business after receiving further details about the Hong Kong-based group’s concessions.

The European Commission last month halted its scrutiny of the deal pending additional information from Hutchison.

Controlled by Asia’s richest man Li Ka-shing, the company is seeking to boost its position in Europe where it operates in six national mobile markets, including Ireland with its Three business.

Taking over O2 Ireland will make Hutchison Ireland’s second biggest mobile operator behind Vodafone, but it has raised fears that a reduction in the number of network operators from four to three could lead to higher consumer prices.

The deal is seen as crucial for the telecoms industry, which is looking to consolidation as a means to improve margins but tough concessions demanded by EU regulators in return for clearing mergers could dampen the appetite for further company tie-ups.

Hutchison submitted a package of concessions in March after the EU competition authority expressed concerns about the reduction of mobile operators in Ireland as a result of the deal.

The company is ready to cede spectrum and customers to a smaller rival for free and to continue a network-sharing agreement with Eircom’s subsidiary Meteor, the third biggest operator in Ireland, according to sources.