CKH wins appeal over UK mobile merger

Business | Kevin Xu 29 May 2020

CK Hutchison (0001) said it welcomed the judgment by the General Court of the European Court of Justice upholding the group's appeal against and annulling the European Commission's decision in 2016 to prohibit the merger between Three UK and O2 UK.

Four years ago, the European Commission blocked the 10.3 billion (HK$98.1 billion) takeover of O2 UK by Three UK, owned by CK Hutchison (0001), on the grounds that the merger would reduce consumer choice and raise prices by reducing the number of networks from four to three.

The multinational conglomerate argued that the Commission's approach to reviewing the proposed merger and European telecoms mergers more broadly was guided by a misconceived default view that European telecoms markets are better served by having a minimum of four Mobile Network Operators in each EU Member State.

This approach ignores market realities, such as the clear evidence of successful market consolidation in Europe and across the world as well as the very significant efficiencies in terms of increased investment, network improvements and consumer benefits that can be achieved from mobile mergers, the company said.

"The Commission's approach has unfortunately acted as a brake on, or in a number of cases prevented, vital industry consolidation in Europe which would have resulted in significant new investment, innovation and benefits for European consumers and industry," it said.

Meanwhile, 3 Hong Kong, the mobile arm of Hutchison Telecommunications Hong Kong (0215), said it will provide secure and reliable connectivity and data transmission services to serve HK Electric's Advanced Metering Infrastructure scheme which commenced in April.

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