Bloomberg News

Vodafone and Telefonica U.K. Venture Said to Win EU Approval

September 04, 2012

Vodafone Group Plc (VOD), Telefonica SA (TEF)’s O2 unit and Everything Everywhere Ltd. are set to win unconditional European Union approval for a joint venture to create a U.K. mobile-phone payment platform, according to two people familiar with the decision.

The European Commission has told the companies that it may approve the deal as soon as this week, said the people who asked not to be identified because the decision isn’t yet public. The regulator didn’t send out a formal statement of objections earlier this year setting out potential concerns with the deal, the people said.

Regulators extended their investigation in April, saying the companies may be able to block competitors from offering their own “mobile wallet” services to U.K. customers or to “degrade the quality” of services to make them less attractive.

The U.K.’s three largest mobile operators sought EU approval for the joint venture to help banks and advertisers access services that will allow customers to buy items from groceries to clothes with their smartphones. After losing out to Apple Inc. (AAPL:US) and Google Inc. (GOOG:US) in offering online application stores, the companies want to accelerate the development of additional services to drive revenue and boost smartphone sales.

Antoine Colombani, a spokesman for the commission in Brussels, declined to comment on the transaction.

Vodafone, O2 and Everything Everywhere, owned by Deutsche Telekom AG (DTE) and France Telecom SA (FTE), declined to comment before the EU decision is public.

Market Exclusion

Hutchison Whampoa Ltd. (13)’s Three unit last year raised concerns with the EU over its potential exclusion from the U.K. mobile-phone payment venture set up by its bigger rivals. In the U.S., the country’s largest wireless carrier Verizon Wireless last year blocked Google’s competing mobile-payment system from the Galaxy Nexus smartphone from Samsung Electronics Co., citing security issues.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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