Mobile Phone Radiation
A technician examines a mobile phone in a test room at the Market Surveilance Laboratories of the Information and Communication Technologies Authority of Turkey, in Ankara June 9, 2011. Founded in 2007 with funds from the European Union, the facility, comprising of five different labs, tests mobile telephones and other communication devices to determine their Specific Absorbition Rate (SAR) value. SAR is a measurement of how much electromagnetic radiation is absorbed by body tissue whilst using a mobile phone. Reuters/Umit Bektas

Britain’s antitrust regulator has triggered a possible turf war with the European Union over which should probe CK Hutchison Holdings’ proposed acquisition of Telefonica’s O2 unit in the U.K. Li Ka-shing’s Hutchison offered to acquire the mobile service provider O2 in March 2015 to become Britain’s biggest wireless provider.

Now Britain’s Competition and Markets Authority has asked the European Commission to look into the jurisdiction of the review as the deal’s impact would be most felt by U.K. customers.

However, the commission has already started probing the tie-up and set Oct. 16 as the deadline for a preliminary decision. The CMA said it has received support from the telecommunications industry in moving such a request, Bloomberg reported.

Vital query

The CMA invited comment on the anticipated acquisition by CKHH of O2 UK as notified to the European Commission. The issue is CKHH also owns Hutchinson 3G UK Limited (Three), a mobile network operator in the U.K., which started commercial operations in March 2003 with a 2100 MHz 3G network.

O2 UK offers mobile communications services such as voice, SMS, MMS, mobile Internet and mobile broadband services. It also offers retail fixed broadband to business customers and provides Wi-Fi services. Post-merger, the plan is to run both Three and O2 UK as a combined business.

The CMA is considering whether the proposed merger:

1. qualifies for a request to be made under Article 9 of the EU Merger Regulation and have it referred to the United Kingdom authorities.

2. If so, is it appropriate for the CMA to make a request under Article 9 of the ECMR for the Proposed Merger to be referred in whole or in part to the United Kingdom authorities?

The European Commission generally does not entertain such requests as the one mooted by CMA because it develops the ground rules for mobile phone competition. There is already a history of EU regulators having spurned a similar U.K. bid for jurisdiction on EE Ltd. some five years ago.

Consolidation and Float

Meanwhile, post-merger the impact in the U.K will be that the number of mobile operators will be dropping from four to three and spectrum re-farming can crop up.

According to co-managing director Canning Fok, “there is a liquidity requirement by our investor group and one way to provide that will be an IPO.”

It means having spent £10.3bn (AU$21.85 billion) to buy O2 from Telefonica, investors are looking for a return by going for an IPO float. Fok also said Three boss David Dyson will lead the combined company and hinted O2’s boss Ronan Dunne will have to step down, the Register reported.

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