The Competition and Markets Authority (CMA) has provisionally cleared the proposed £31.4bn merger of broadband provider Virgin Media and Telefónica’s UK mobile network O2.
“Having examined the evidence, the CMA inquiry group has now provisionally concluded that the deal is unlikely to lead to any substantial lessening of competition in relation to the supply of wholesale services,” the watchdog said in a statement.
Liberty Global, owner of Virgin, and Telefónica announced a deal last May to merge their UK operations in a 50-50 joint venture.
The merger was scrutinised by the CMA to assess if it would mean higher prices for rivals using their wholesale services.
“A thorough analysis of the evidence gathered during our phase 2 investigation has shown that the deal is unlikely to lead to higher prices or a reduced quality of mobile services – meaning customers should continue to benefit from strong competition,” said Martin Coleman, chair of the CMA panel inquiry.
The joint venture plans to invest £10bn in the UK over the next five years and is expected to provide some strong competition to BT Group PLC (LON:BT.A), the largest provider of fixed-line, broadband and mobile services in the UK.