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(Adds Telefonica-Virgin statement)
LONDON, Dec 11 (Reuters) - Britain on Friday said it had
referred the merger between broadband company Virgin Media and
Telefonica's UK mobile network O2 to an in-depth
competition investigation, given the potential impact of the $38
billion deal on consumers.
The Competition and Markets Authority said O2 and Liberty
Global-owned Virgin had requested the merger should be
fast tracked to an in-depth investigation.
It said both Virgin and O2 provided wholesale services to
other mobile network operators in the UK, including wholesale
mobile services and mobile backhaul.
"The CMA is concerned that, following the merger, Virgin and
O2 may have an incentive to raise prices or reduce the quality
of these wholesale services, ultimately leading to a worse deal
for UK consumers," it said.
The two companies said they were pleased that the CMA had
agreed to their request to start a fast-track to Phase 2.
"We look forward to working constructively with the CMA to
achieve a positive outcome," a spokeswoman for the two said.
"We continue to expect the transaction to close around the
middle of next year."
Liberty Global and Telefonica agreed in May to merge their
British businesses to create a powerhouse in mobile and
broadband to take on market leader BT.
(Reporting by Paul Sandle; editing by Sarah Young and James
Davey)
