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LONDON, April 14 (Reuters) - Britain's competition watchdog
said on Wednesday it has provisionally cleared a merger between
broadband company Virgin Media and Telefonica's UK
mobile network O2 after an investigation into the $38 billion
deal's potential impact.
The Competition and Markets Authority said that its
investigation had focused on whether the deal was likely to
result in a substantial reduction of competition in the supply
of wholesale mobile services and concluded this was unlikely.
"A thorough analysis of the evidence gathered during our
phase 2 investigation has shown that the deal is unlikely to
lead to higher prices or a reduced quality of mobile services –
meaning customers should continue to benefit from strong
competition," said Martin Coleman, CMA Panel Inquiry Chair.
The regulator said it believed there was sufficient
competition within the market to prevent either player raising
wholesale prices in broadband or mobile to the detriment of
rivals who use its infrastructure.
Virgin Media owner, Liberty Global Plc, and
Telefonica agreed in May last year to merge the British
businesses to create a powerhouse in mobile and broadband to
take on market leader BT Group.
The two sides set out earlier this month its new management
team, with the Virgin Media boss Lutz Schuler becoming chief
executive.
(Reporting by Iain Withers; Editing by Dhara Ranasinghe and
Sarah Young)