The European Commission has approved Hutchison Whampoa's acquisition of O2 Ireland, reducing the Irish mobile market to three network operators. Hutchison, which operates the 3 network in Ireland, agreed to a number of concessions in order to secure regulatory approval for the deal announced almost a year ago. The concessions address the EC's concerns about reduced competition on the market and the high barriers to entry for any new players on the relatively small Irish market.
3 will provide network capacity to at least two MVNOs in the near term, as well as give them the option to acquire spectrum. The MVNOs will have access to up to 30 percent of the merged operators' network capacity in bandwidth terms, with a dedicated "pipe" for voice and data traffic. They will enjoy payment at fixed terms, rather than a pay-as-you-go model as is common for MVNOs. The EC expects the dedicated capacity and payment terms will give the MVNOs the capacity to replicate 3's low-price offers in the market. From the start of 2016, they will have the option to acquire five blocks of spectrum in the 900, 1,800 and 2,100 MHz bands for ten years, if they wish to roll out their own mobile networks.
In addition, Hutchison will maintain O2's network roaming agreement with Eircom, including access to LTE. Eircom will be the smallest operator after the merger and needs the roaming agreement in order to ensure national coverage. Hutchison agreed to continue the network agreement, under improved terms.
The merger of O2 and 3 Ireland, the second and fourth largest players on the market, was first announced in June 2013. Hutchison will pay Telefonica EUR 850 million for O2. The company said the deal will give it the strength to challenge Vodafone for the number one position on the market. 3 estimates its market share will grow to 37 percent after the takeover, with over 2 million active customers. Its revenue will jump to EUR 736 million on a pro forma basis for 2013, versus EUR 180 million on its own.
