Canning Fok, group co-managing director at CK Hutchison and chairman of Three UK, has written a letter defending his company’s agreed £10.5bn acquisition of O2 from Telefónica. The move follows a letter written earlier this week by Sharon White, CEO of UK sector regulator Ofcom, outlining her opposition to the deal on competition grounds.
Canning Fok, group co-managing director at Hong Kong-based conglomerate CK Hutchison (SEHK:0013) and chairman of Three UK, has written a letter defending his company’s agreed £10.5bn (US$15bn) acquisition of O2 from Telefónica (MAD:
The move follows a letter written earlier this week by Sharon White, CEO of UK sector regulator Ofcom, outlining her opposition to the deal on competition grounds.
In his letter today, Fok, who said White had not “asked for or heard our views in response to her concerns,” set out three “clear commitments” to UK consumers.
First, he said Three-O2 would not raise voice or data prices for the five years following the merger: “Every cost efficiency that combining the businesses achieves will be shared with our customers. Like for like, customers’ bills will go down.”
Second, he promised that Three-O2 would invest £5bn (US$7.3bn) in their UK businesses over the next five years, which he described as “at least 20% more than would have been invested by the two companies on their own”. He said this more efficient spending would benefit capacity, coverage, reliability and data speeds, adding: “For those who care to take an objective look, what we’ve done since combining Three with Orange in Austria in 2013 provides empirical proof of this assertion”.
Third, he guaranteed that Three-O2 would enable “other meaningful competitors…to offer services on a completely level playing field by offering for sale fractional shared ownership interests in our network capacity – in effect selling slices of the same network capacity and quality we use to serve our own customers,” a move he said was “unprecedented in the UK telecom wholesale market”.
Finally, he pointed out that the combined group would be better able to “stand up to the new Leviathan BT” (referring to the description used by TalkTalk CEO Dido Harding following UK competition watchdog the CMA’s decision to allow the incumbent to acquire EE without any conditions), as well as “the old top-of-the-heap predator Vodafone.”