VMO2 - comment
Lutz Schüler’s latest intervention on BT’s proposed acquisition of TalkTalk appears aimed less at preventing the transaction outright than at establishing a precedent that Virgin Media can use to influence the regulatory treatment of Nexfibre’s proposed acquisition of Netomnia.
From this ministerial letter, VMO2 could reap two potential benefits. First, a detailed CMA review could theoretically result in remedies, including the divestment of parts of TalkTalk, although we see this as unlikely. More importantly, second, Schüler is highlighting the inconsistency between the Government’s willingness to intervene to facilitate BT’s acquisition of a distressed competitor and the CMA’s competition concerns over the nexfibre–Netomnia deal. This gives VMO2 a stronger argument that consolidation is necessary to support investment and financial sustainability across the UK broadband market, rather than simply protecting BT’s position.