Three formally concludes its acquisition of O2 in Ireland

15 Jul 2014

Robert Finnegan, CEO of Three Ireland

Hutchison Whampoa’s mobile subsidiary Three Ireland has formally concluded its €850m acquisition of O2 Ireland from Telefónica, making Three effectively the second largest mobile operator in Ireland.

The acquisition received the green light to proceed in May from the European Commission.

“This is a big day for the Irish telecoms market,” Three CEO Robert Finnegan said.

“We will now get down to the task of combining the strengths and talents of the two businesses to create a major force in the Irish mobile market, which will be good for competition, good for consumers and good for Ireland.”

Under the conditions imposed by the European Commission, Three has committed to provide network capacity and mobile virtual network operator (MVNO) services to two MVNOs in order to facilitate new MVNO entry into Ireland.

As part of this, cable and TV broadband player UPC emerged as the first MVNO to offer mobile services across Ireland and will begin offering mobile services in 2015.

A similar arrangement with Carphone Warehouse followed in recent weeks, which also intends to start offering mobile network services to consumers in July 2015.

As part of the conditions set down by the European Commission, MVNOs have the option to acquire spectrum to become a full network operator.

Potential legal hurdles ahead

In the aftermath of the EU’s green light, both ComReg, Ireland’s communications regulator, and mobile operator Vodafone expressed concerns over competition.

ComReg expressed its belief that the European Commission’s concerns over competition won’t be addressed and suggested there will be negative consequences for Irish consumers.

Vodafone said it doubts whether either MVNO – UPC or Carphone Warehouse – will take up the option to acquire additional 3G and 4G spectrum from Three and as a result Hutchison will retain all the spectrum holdings of Three and O2 in Ireland.

“Vodafone also has significant concerns that the proposed remedies will distort healthy competition rather than preserve it, and will act as a barrier to future investment in next-generation communications in Ireland,” Vodafone said.

Vodafone said it is considering its options under both EU and Irish law to ensure all operators receive an efficient allocation of spectrum in Ireland.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years