British competition regulators have approved the £31.4 billion ($44.4 billion U.S.) merger of telecommunications companies Virgin Media and O2.
Britain’s Competition and Markets Authority greenlit the deal after finding that it was unlikely to lead to a substantial lessening of competition in the telecommunications market.
The regulator had earlier expressed concern that the tie-up may lead to price increases or reduce the quality of wholesale services, which it says would have negatively impacted consumers.
The competition watchdog said there was sufficient competition in the leased-line market from other players such as BT Openreach. At the same time, the Competition and Markets Authority said there remains stiff competition in the mobile networks market.
"After looking closely at the deal, we are reassured that competition amongst mobile communications providers will remain strong and it is therefore unlikely that the merger would lead to higher prices or lower quality services," the regulator said in a news release.
The deal between Virgin Media and O2 will lead to the creation of a new giant in the British telecoms industry. The new group will have a total of 46 million video, broadband and mobile subscribers and $16 billion U.S. in annual revenues.
The combination of the two companies will also allow Virgin Media to tap O2′s experience in developing next-generation 5G mobile networks, which are expected to be a significant driver of sales for telecommunications companies moving forward.
