Three/O2 merger completes promising better services and deals for customers but national regulator not so happy

On the same day as the European Commission granted conditional clearance for Three’s acquisition of O2 Ireland, ComReg took the somewhat unusual step of publicly stating that it “remains concerned” about the effects of the merger on Irish consumers.

Although it is not uncommon for ComReg to publish so-called Information Notices about developments in the Irish telecoms market, the timing and tone of ComReg’s Notice concerning the European Commission’s merger clearance decision suggests ComReg will want to keep competition in this market under close review.  ComReg stated that “while fully respecting the EC’s position as the decision-making body for the assessment of the Proposed Acquisition … ComReg…will monitor the competitive dynamic of the mobile markets affected; and proceed with its strategy for managing the radio spectrum including the identification of other spectrum releases in order to promote competition and further promote innovation and network investment, among other things.”  

Many would be forgiven for thinking that ComReg was not closely involved in the Commission review process.  In fact, ComReg was fully engaged throughout and made a number of submissions to the Commission and - along with other third parties and Member States’ competition authorities - attended the Oral Hearing. 

Further developments 

On 21 August, ComReg launched a consultation and draft decision(ComReg 14/88) to extend the existing – GSM - 1800 MHz licence granted to O2, for a further six and a half month period. The relevant six and a half month period lies between the expiry of O2’s current 15-year GSM 1800 MHz licence on 31 December 2014, and the commencement of its liberalised rights of use in the 1800 MHz band on 13 July 2015 (ie, time slice 2).  The anomaly between expiry of O2’s existing GSM licence and commencement of its liberalised use licence has arisen out of the results of ComReg’s 2012 multi-band spectrum auction (“MBSA”).  Under the MBSA, O2 failed to win liberalised use spectrum in time slice 1 (ie, 1 February 2013 until 12 July 2015), giving rise to a six and a half month gap.  

Drawing on a similar approach taken by ComReg with respect to O2’s and Vodafone Ireland’s (GSM) 900 MHz licences, ComReg has proposed to grant an interim licence to O2 so as to bridge the six and a half month gap.  The interim licence would be on the same terms and conditions as the original O2 licence, but the relevant spectrum access fees and spectrum usage fees would be adjusted to take account of inflation to €1.36 million.  Interested parties have until 2pm on 18 September 2014 to respond to the consultation.