The UK’s Competition and Markets Authority (CMA) has outlined its concerns on the proposed merger of Liberty Global’s Virgin Media and Telefónica’s O2. Its focus is on the possible impact of the merger on the supply of wholesale mobile services to MVNOs and other MNOs.
The CMA is worried that the combined company could potentially erode the supply of wholesale mobile services to rival MVNOs, leading to reduced competition. The regulator is concerned about the impact on fixed MVNOs in particular – companies that provide bundles of fixed and mobile services that compete directly with the new entity. The most prominent current example is Sky, where O2 currently supplies its wholesale mobile services.
The CMA is also concerned about the possible impact of the merger on the supply of wholesale leased lines to mobile network operators that use these for mobile backhaul. It pointed out that Virgin Media is currently the second largest provider of mobile backhaul to MNOs in the UK after BT Openreach.