Commission objects to 3's proposed takeover of O2
The country's biggest telecoms acquisition in a decade hangs in the balance with the European Commission lodging a statement of objections to the €700m takeover of O2 Ireland by 3 Ireland.
Fears of reduced access to the market for new entrants and an over-concentration of 4G spectrum are believed to be among the concerns harboured by the European body.
The commission is also understood to be considering fears that network-sharing deals such as those active between O2 Ireland and Eircom might fall into doubt.
"3 Ireland are analysing the statement and we will be responding to the commission's concerns," said a spokesman for the company.
"We will put forward strong and effective remedies to address the commission's concerns. We will detail these and other points in our response to the commission's Statement of Objections and are confident that we can convince the commission of the pro-competitive benefits of the proposed acquisition."
The operator has yet to make a profit in Ireland. In 2011, it committed €105m for 4G spectrum and launched the first tranche of its 4G services in Ireland last month.
The company's spokesman said that Vodafone, with 40pc of the Irish mobile market, was in a "dominant" position. The proposed acquisition would see 3 Ireland, which is owned by Hutchison Whampoa, increase its market share from 9pc to 38pc.
"The Irish mobile market is currently characterised by one clear dominant market leader with the three other operators lagging behind," he said.
"Without 3's acquisition of O2 Ireland and the scale it can achieve, this gap will only increase. Competition in Ireland will be better served by three credible operators with sufficient scale to compete for a total market of 4.6 million than by the current market structure.
"The acquisition of O2 Ireland will provide 3 with the scale and financial strength necessary to compete aggressively in the market to the benefit of Irish consumers.
It will give 3 the means to challenge the number-one player in the Irish market by rolling out a state-of-the-art 4G/LTE network and providing the best value and service to its customers."
While the matter is being decided principally by the European Commission, a spokesman for the Irish Competition Authority said that it remained part of an advisory committee involved in discussions of possible remedies.
The Competition Authority is also to be consulted on the proposed decision of the commission, according to the spokesman.
A decision is expected from the European Commission by March 24.