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TELECOMS

EU COMPETITION regulators will tell Hutchison Whampoa this week that the $1bn (€780m) deal for its Three Ireland mobile phone business to take over Telefonica's O2 Ireland unit might be problematic unless it offers concessions, people familiar with the matter said.

Regulatory reviews of the Irish merger and another in Germany where Telefonica Deutschland is seeking to buy Dutch group KPN's local unit E-Plus, are seen as critical for the mobile industry in determining whether the European Commission (EC) will allow deals which reduce the number of players in a national market.

The EC opened an in-depth investigation into the €780m bid by Hutchison for O2 Ireland two months ago and will send a statement of objections laying out its concerns to Hutchison this week, the sources said.

"It shows the Commission getting tough on three to four deals," one of the people said. "Hutchison will be offering concrete remedies once it receives the statement of objections."

The acquisition of Telefonica's mobile business in Ireland would quadruple Hutchison's share of the Irish market to 37.5pc, behind market leader Vodafone's 39.4pc but ahead of rival Meteor's 19.7pc.

Commission spokesman Antoine Colombani declined to comment. The EU watchdog has set an April 24 deadline for its decision. It can extend the review depending on when Hutchison submits concessions. The company can request an oral hearing in front of senior Commission officials to argue its case.


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