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Virgin Media backs the O2-Three merger

Virgin Media has backed the proposed takeover of O2 by Three, and the media believe this move might improve the chances of the deal being approved by regulators.

Commenting on the proposed merger, Virgin Media's Tom Mockridge said any competition issues should not stand in the way of the deal.

"‎Any competition concerns can be addressed without blocking the proposed O2-Three transaction,” he wrote in a blog post.

Virgin Media is a rival to both Three and O2 but, according to a report by the Financial Times, its parent company Liberty Global is keen to take advantage of the proposed merger.

It can do so by launching a “fully fledged mobile service in the UK”.

In his argument, Mockridge gave examples in Austria and Ireland, where the number of mobile operators shrunk from four to three.

"The Commission has previously cleared mobile mergers which resulted in a reduction in the number of mobile operators from four to three, subject to wholesale remedies. In two of these cases, Austria and Ireland, Virgin Media's parent company Liberty Global provides vigorous competition and consumer choice as a result of taking EU remedies.

“The same can be true in the UK. A combined O2-Three could have more to offer consumers and, crucially, more capacity for other providers who want to drive competition in their own right. With the right remedies, this deal could stimulate not curb competition,” he concluded.

Three proposed to acquire O2 for £10.5 billion, an idea which prompted Ofcom to react and ask the EU to block it.