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Exclusive: Hutchison ready to sell spectrum to get O2 Ireland - source
February 25, 2014 / 5:25 PM / 4 years ago

Exclusive: Hutchison ready to sell spectrum to get O2 Ireland - source

BRUSSELS (Reuters) - Hutchison’s 0013.HK Three Ireland is prepared to sell radio spectrum and continue a network sharing deal with a rival in order to win EU approval of its $1 billion bid for Telefonica’s (TEF.MC) O2 Ireland, a source familiar with the matter said on Tuesday.

The logo of Hutchison Whampoa Ltd is displayed at one of the company's office towers in Hong Kong August 1, 2013. REUTERS/Bobby Yip

Hong Kong-based conglomerate Hutchison Whampoa, controlled by Asia’s richest man, Li Ka-shing, wants to strengthen its position in Europe where it operates in six national markets, and the lengths to which it is going to secure acceptance of the Irish deal is a telling sign of how tough the European Commission will be on telecoms mergers.

That rigor on the part of the EU’s competition regulators could also have implications for a bigger deal in Germany, where Telefonica Deutschland (O2Dn.DE) wants to buy KPN’s (KPN.AS) E-Plus 8.6 billion-euro ($12 billion).

Adding O2 will make Hutchison Whampoa Ireland’s second biggest mobile operator behind Vodafone (VOD.L), but it has raised fears that a reduction in the number of network operators from four to three could lead to higher consumer prices.

“Hutchison will offer to sell spectrum to MVNOs (mobile virtual network operators) and guarantee to keep in place a network sharing agreement with eircom,” the source told Reuters, adding that Hutchison would submit its offer to the European Commission within two weeks.

The company secured EU approval for its acquisition of Orange Austria two years ago with similar concessions.

The EU competition authority opened an extensive investigation into the 02 Ireland takeover more than three months ago.

It also expressed worries about the effect on 02’s network sharing agreement with the third biggest operator, eircom’s subsidiary Meteor. It has set an April 24 deadline for its decision.

Hutchison confirmed it has not offered any concessions to regulators up to now.

“We haven’t put any remedies forward; whatever is being said is speculative. Hutchison has said that it is very happy to produce strong remedies as it wants a positive outcome as soon as possible,” said company spokesman Neil McMillan.

The company set out the case for allowing its 02 Ireland deal before senior Commission officials and national competition officials at a closed door hearing on Tuesday.

Executives from eircom, Vodafone, Tesco Ireland (TSCO.L), which runs a virtual mobile network in Ireland, cable operator Liberty Global (LBTYA.O) and BT Communications Ireland also attended the session.

($1=0.7282 Euros)

Editing by Greg Mahlich and Will Waterman

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