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Three tries to win EU approval for its O2 merger

Three UK is trying to win approval from the EU by adding a number of perks including £3 billion in network deals with competitors to its £10.25 billion merger with O2.

CK Hutchinson, the owner of Three, has signed deals with both Virgin and Sky that will guarantee both mobile operators will have space on its mobile network if its deal with O2 comes to pass. This move by the company is a last ditch effort to assuage regulators fears that its merger could rdamage market competition.

Margrethe Vestager, the EU's competition chief, is insisting that a fourth mobile operator needs to be created in order for the deal to be approved. Brussels and Ofcom have also stated that if the market loses a network operator that consumer prices will inevitably be raised. Analysts though are arguing in favour of the deal to increase investments in mobile networks.

Head of Ofcom Sharon White believes that regulators are concerned that by acquiring O2, Three will become the largest mobile operator and would control more than 4 in 10 mobile connections. Hutchinson has pledged that Three would avoid raising consumer bills for five years and would invest £5 billion into the UK over the course of those five years.

If Three's takeover of O2 does go through, Sky will take a 20 per cent stake in the network worth £20 billion while Virgin Media will take a 10 per cent share. Both companies are in favour of the deal and have stated so publicly.

EU officials will decide next month if the merger of Three and O2 will go through. If it does, Three's investment in the UK could help fund an improved network for consumers.

Image Credit: mubus7 / Shutterstock

Anthony Spadafora
After living and working in South Korea for seven years, Anthony now resides in Houston, Texas where he writes about a variety of technology topics for ITProPortal.