The sale of Telefonica’s O2 to Hong Kong telecoms giant Hutchison remains up in the air. And the European Commission (EC), which has the final responsibility for the outcome of the transaction, is still being a dog in a manger, under pressure from the UK authorities. So the deal is being kept in a state of permanent indefinition, one year after the two companies involved reached an agreement.
After delaying the final decision until May 19th, nothing seems to satisfy the Commission. The result of this is that its known role is neither to reject the operation out of hand, or fully authorise it, despite the fact that Hutchison is offering all kinds of alternatives: the latest one being the sale of a stake in Three to a new investor, with which it hopes to soften the EC’s tough position. As of now, this seems to be that it will approve the purchase, but with draconian conditions including substantial divestments. This could lead Hutchison to renegotiate the agreed price for the deal (about 14 billion euros) or decide against buying certain assets.
It’s all about increasing competition in the UK telecoms market, without taking into account that if there is a problem of excessive concentration in the spectrum in the UK, this is the result of the merger between British Telecom (BT) and Everything Everywhere (EE) (T-Mobile & Orange).
