Three finalise €850 million deal despite objections from ComReg and Vodafone.
Three Ireland has officially concluded the €850 million (£675 million) acquisition of O2 Ireland from Telefonica, making Three the second largest mobile operator in Ireland.
The acquisition was approved by the European Commission in May but was opposed by Irish regulator ComReg, who labelled the competition remedies proposed by Three as “insufficient, inadequate and ineffective.”
ComReg had expressed concerns that the number of operators in Ireland falling from four to three may harm competition and lead to prices going up for consumers.
However, Hutchinsons-owned Three claimed the deal was important for the Irish telecoms market. Three Ireland chief executive Robert Finnegan said: “This is a big day for the Irish telecoms market.
“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.”
Three originally announced that they had reached an agreement with Telefonica to buy O2 in Ireland for €780 million (£618 million) in June 2013. They will be required to pay another €70 million depending on hitting agreed financial targets.
The combined business will hold around 37 per cent of the market share, making the group the second biggest mobile operator behind Vodafone, who hold around 40 per cent of the market.
Three has set out intentions to invest around €300 million in its network following the deal. They are also required to provide network capacity and MVNO services to two MVNOs in order to facilitate new entrants in to the Irish market. Carphone Warehouse Ireland has already announced a yet-to-be-named MVNO which will run off the Three network.
In 2012, Three and O2 had combined revenues of €803 million, which compared to Three’s individual revenue of €174 million in the same year. The joint venture will now hope to pass Vodafone to become market leader.
When the deal was originally announced, Finnegan set out how they would achieve this, saying: “Our combined market share gives us the scale and financial strength to compete even more aggressively in the market to the benefit of consumers.
“Our ability to invest coupled with the combined subscriber base will create new competitive dynamics in the Irish telecoms market.”
Despite Three’s claim that the move will benefit the market, they could face legal hurdles from both ComReg and Vodafone.
Vodafone expressed doubts over whether the additional spectrum will be needed by an MVNO and said the move could “distort healthy competition.” They will now consider options under both EU and Irish law.