Comreg may block Vodafone/3 merger deal

Comreg may block a proposed deal between Vodafone and 3 to merge their Irish telecoms infrastructure in a measure designed to cut costs.

Comreg said they could not comment on the reported plans of two of Ireland’s largest mobile phone operators to develop a shared network.

A spokesperson for the regulator pointed to a previous document produced by ComReg that said the body would have policy concerns about any merger.

“ComReg is aware of the potential policy concerns, particularly in relation to competition,” the ComReg policy document said. “In addition, it is not possible for ComReg to give blanket assurances that spectrum sharing and pooling agreements will be permitted because the benefits and disadvantages arising from any particular agreement.”

It was reported yesterday that Vodafone and Hutchison Whampoa’s 3 are close to agreeing a deal to merge their Irish telecoms infrastructure. The merger will create a 50-50 joint venture that would result in the biggest network in Ireland while producing “significant” cost savings, one of the sources said without elaborating on the size of the savings.

The Financial Times said the savings for each business could exceed €248m over a five-year period.

There have been a spate of similar deals across Europe, where operators are looking for ways to upgrade their networks at a time when customers are cutting back on spending.

Vodafone announced a deal in June to share a network in Britain with Telefonica’s O2 to help cut the cost of building a new superfast service.

A spokesperson for Ireland offline a lobby group for the mobile phone and broadband industry said the deal would make sense for operators but could hit ComReg. “ComReg have blocked the idea of a shared radio access network in Ireland. They believe that competition will serve the country better. In rural areas this is not true. Comreg get more money if there are more network operators in the country. Basically what is happening here is mobile operators have come to a pragmatic agreement to decide to share there infrastructure.”