Eircom has raised concerns with the European Commission that the takeover by mobile phone operator Three of rival O2 could damage competition in the market here.
Eircom wants the commission to reallocate valuable spectrum held by Three and O2 to its mobile subsidiary Meteor and rival Vodafone. This spectrum can be used to provide high-tech 4G services to customers.
It is also concerned about the cost implications for the company if its network sharing deal with O2 is scrapped by Hutchison, the Hong Kong parent company of Three.
Meteor holds a 20 per cent market share here. Eircom is concerned a merger of Three and O2 would put it at a significant competitive disadvantage as the merged entity would be similar in size to market leader Vodafone.
It wants the commission to reallocate spectrum licences held by Three and O2.
At present, all four mobile operators hold two blocks each of 800 megahertz spectrum. A merger of Three and O2 would give them three blocks of 900 megahertz spectrum compared with two each for Meteor and Vodafone. Eircom wants the additional block put out to tender.
At the 1,800 megahertz level, Three and O2 would hold seven blocks of spectrum, compared with three for Eircom and five for Vodafone. Eircom wants the commission to reallocate two of the bands to Meteor and one to Vodafone. This would give each operator five bands.
All three bandwidths were subject to an auction by Comreg in November 2012, which raised €481.7 million in upfront fees for the State.
In addition, Eircom is arguing that two of the 2,100 megahertz blocks (relating to 3G) held by Three/O2 should be reallocated to Meteor and Vodafone to give each group four of these blocks.
Network sharing
Eircom has also raised concerns about the potential negative impact on it if its network sharing partnership with O2 were scrapped by Hutchison.
Three has its own deal with Vodafone, designed to achieve cost efficiencies by reducing the duplication of expensive network infrastructure.
It is understood the commission might also seek a remedy from Hutchison in relation to providing wholesale access for a new virtual mobile provider that would piggyback on the Three/O2 network.
Hutchison’s acquisition of O2 (owned by Telefónica Ireland) was notified to the Commission on October 1st last year. It has until March 24th to rule on the deal.
