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UK Competition Body Authorizes Merger of O2 and Virgin Media

LONDON, Apr 14 (Reuters) – Britain’s competition watchdog said on Wednesday that it has provisionally authorized the merger between broadband company Virgin Media and British mobile phone network Telefónica O2, following an investigation into the possible impact of the operation, valued at 38,000 million dollars.

The Competition and Markets Authority said its investigation had focused on whether the transaction was likely to lead to a substantial decrease in competition in the supply of wholesale mobile services and concluded that the odds were slim.

“A thorough analysis of the evidence gathered during our phase 2 investigation has shown that the deal is unlikely to lead to an increase in prices or a reduction in the quality of mobile services, which means that customers should continue to benefit from strong competition, “said Martin Coleman, chair of CMA research.

The regulator believes there is enough competition in the market to prevent either player from raising wholesale prices for broadband or mobile to the detriment of rival operators that use its infrastructure.

Virgin Media owner Liberty Global Plc and Telefónica agreed in May last year to merge the British companies to create a powerhouse in the mobile telephony and broadband sector facing market leader BT Group.

Earlier this month, the two sides have established their new leadership team, with Virgin Media boss Lutz Schuler becoming CEO.

(Information from Iain Withers; edited by Dhara Ranasinghe and Sarah Young; translated by Flora Gómez at the Gdansk newsroom)

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