News: Three and O2 merger might propel Virgin Media into the big time

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In the wake of recent developments regarding the merger of Three and O2, Virgin Media has hinted this week that the firm might take advantage of any forced sale of mobile spectrum.

Three’s owner Hutchison and O2’s Telefonica also met recently with regulators in Brussels, as well as rival UK operators and interested parties. Virgin’s parent company Liberty Global also confirmed that it would join the fray if a selloff is ordered by the EU.

Hutchison has previously said it would sell capacity on the new network, to reassure regulators that customers would not lose out due to the smaller number of UK operators.

One of those operators, Tesco, who already buys capacity from the incumbents, also stated it might purchase spectrum and perhaps even acquire O2’s stake in Tesco Mobile, a joint venture between O2 and Tesco. Adding another player to the mix, Sky News is likely to be interested as it ramps up efforts in the mobile sector.

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Virgin has been looking at a possible merger with Vodafone, something that the Daily Telegraph said would create “a powerful combination of fixed line and mobile networks across Europe”.

If the EU does mandate selling off physical assets (such as masts and other telecommunications equipment) to encourage another player, Virgin might be in a prime position to launch as a totally independent, fully-fledged operator in its own right.

“Any competition concerns can be addressed without blocking the proposed O2-Three transaction. The Commission has previously cleared four to three mobile mergers subject to remedies and Liberty Global has been an effective remedy taker in Austria and Ireland before”, said Manuel Kohnstamm, a spokesman for Liberty Global.

“In this particular case, we believe that the Commission’s concerns could be resolved by an operator with a viable long term future. Virgin Media and its parent Liberty Global are committed to explore any opportunity with the merging parties”.

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