The EU Commission will convene for a final session of oral hearings tomorrow concerning the proposed takeover of O2 in Ireland by rival 3.
The €780 million deal was announced last summer subject to regulatory approval and whether it goes ahead or not will have massive implications for Irish sport.
Back in June 2013 we posed six key questions around the merger, why it mad business sense and what impact it would likely have on Irish sport.
We are now only four weeks away from getting answers and there is growing concern that they may not be the right ones.
The commission is reported to be worried about price rises that took place in Austria when a similar merger went through with 3 taking over a fourth operator and reducing competition.
Vodafone is said to have argued against the deal and will do so again in these final stages. It currently has a customer base here of 2.2 million. The combined base of 3 and O2 would bring it to around 2 million with Meteor, as part of the Eircom group in third spot.
The fear is that if the deal does not go through that 3 parent company Hutchinson Whampoa will withdraw from Ireland and leave the same reduced number of operators anyway.
That would be a serious blow to sport with 3 the FAI’s senior commercial partner and also involved in rugby and the GAA. It previously sponsored the Irish Open in golf and sport has always been a major keynote of the company profile.
The current high profile campaign seeking to attract SME and business customers shows a willingness to engage further with the market but the company has stated clearly that acquisition was a major plank of seeking to stem losses in the Irish market that amount to around €50 million a year.
It would be ironic if the Commission’s desire to keep as many competitors as possible from an economic theory perspective was to result in a reduction to the same smaller number by virtue of economic reality. Germany has four mobile operators in a market that s 20 times bigger than ours.
The damage to sport could be even bigger though than to the consumer, with Telefonica seemingly intent on leaving and having reduced its activation around rugby in Ireland considerably this year compared to what it has been doing with the English team.
Complex and difficult weeks ahead then for those involved in maintaining sporting sponsorship at the highest level.
