Telecoms giants O2 and Virgin Media’s £31bn mega-merger gets green light

The £31 billion mega-merger between Virgin Media and O2 has been given the green light by regulators.

Mike Fries, chief executive of Virgin owner Liberty Global, and Jose Maria Alvarez-Pallete, boss of O2 owner Telefonica, said: “This is a watershed moment in the history of telecommunications in the UK as we are now cleared to bring real choice where it hasn’t existed before, while investing in fibre and 5G that the UK needs to thrive.”

The Competition and Markets Authority (CMA) waved through the deal following an in-depth investigation, concluding that concerns customers to see price hikes from the telecoms deal were unfounded.

Officials had provisionally cleared the deal last month and on Thursday confirmed the tie-up, which was first announced a year ago.

At the time the deal was announced, the companies said it would create a “full converged platform” for customers, and will mean an investment of £10 billion in the UK over the next five years.

A Phase 2 investigation found that the deal was unlikely to lead to any substantial lessening of competition for a number of reasons, it said.

Investigators concluded that the costs of leased lines are only a relatively small element of rival mobile companies’ overall costs, so it is unlikely that Virgin would be able to raise leased-line costs in a way that would lead to higher charges for consumers.

They added that competitors in the market offering the same leased-line services, including larger rival BT Openreach, would keep competition healthy.

And the report found that O2 would need to remain competitive with its wholesale rivals due to strong competition.

O2 is the UK’s biggest mobile phone operator with around 36.6 million customers across its networks, which also include giffgaff, Tesco Mobile, Sky Mobile and Lycamobile.