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    Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK

    This is a discussion on Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK within the Sky news and announcements forums, part of the SkyUser Announcements category; Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK - ISPreview UK Reports indicate that Virgin Media ...

    1. #1
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      Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK

      Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK - ISPreview UK
      Reports indicate that Virgin Media and Sky (Sky Broadband) could both sign significant mobile network capacity deals with Three UK (CK Hutchison Holdings), which is dependent upon whether or not the European Commission approves the proposed merger with O2 UK (Telefonica).

      At present Virgin Mediaís mobile service is supplied by EE, although the mobile operatorís recent acquisition by BT has encouraged Virgin to look at alternatives. Virgin briefly explored the possibility of a much more significant deal with Vodafone, but those talks eventually collapsed (here).

      Meanwhile Sky have already signed a Mobile Virtual Network Operator (MVNO) deal with O2 and they aim to deliver a Sky Mobile product by the end of 2016, which will turn them into a quad-play provider. But todayís big news is that both Virgin and Sky may now be considering a major deal to buy capacity from the merged Three UK + O2.

      At present Telefonica and Hutchinson are still fighting tooth and nail to get their proposed £10.25bn UK merger past the regulators, which isnít easy when both Ofcom and the EC are opposed to the deal (here and here). However, in an effort to placate some of those concerns, Hutchison made a number of concessions (here) and one of those involved selling capacity on their network.

      Hutchisonís Proposal:

      Three+O2 will enable other meaningful competitors in the UK market to offer services on a completely level playing field by offering for sale fractional shared ownership interests in our network capacity Ė in effect selling slices of the same network capacity and quality we use to serve our own customers. This is unprecedented in the UK telecom wholesale market. It eliminates the tricks some wholesalers use to disadvantage their wholesale customers and thus make it harder for them in turn to make competitive offerings to their own customers. This approach will deliver real competition, not just slogans.
      According to the Telegraph, Sky is alleged to have preliminarily agreed to a £2bn contract that would see them take a 20% share for over 10 years if the takeover of O2 goes through. Similarly Virgin Media is said to have reached an agreement to take 10% of the capacity on the merged Three UK and O2 network, which is estimated to be worth around £1bn, although this may change if BT/EE offer better terms or the merger falls through.

      The ECís competition review was originally supposed to rule on the merger earlier this year, although Hutchisonís proposed concessions have required some additional time for review. The final proposals have now been made and as such weíre expecting the EC to return a verdict in the very near future (deadline is 19th May 2016).


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    3. #2
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      Re: Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK

      Seems deal is going to be blocked by everyone so losers all round on this story.

      So next speculation who's going to buy O2/3?

      Sounds like Hutchinson would sell 3 if they could buy O2 separately.

      There was speculation while ago that Sky might look to buy a mobile network or may be 21st Century fox might buy it with a licensing deal for Sky.

      Virgin would be a bit ****** I'm sure! Although then Liberty Global would also be in the market and they're not scared of a bit more debt are they?

      Although they might be a bit over-leveraged on this deal, even for them since the price won't be cheap.
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      Re: Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK

      It's a shame really that both Ofcom and the Competition Watchdog are wanting to block this deal.

      It's what has happened in Ireland and we didn't hear any complaints from them.
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      Re: Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK

      Just another case of the UK regulators being in BT's pocket, i mean now that BT owns EE we wouldnt want the mobile market being any less 1 sided in BT's favour than the broadband segment is now would we
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      Re: Sky and Virgin Media Moot Mobile Network Capacity Deal with Three UK

      Interesting that the CMA waved through the BT & EE merger, following their "complex, detailed and rigorous" assessment of the market, with the comment:

      "the evidence does not show that this merger is likely to cause significant harm to competition or the interests of consumers"
      even though an emerging Three & O2 deal was already apparent.
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