Bloomberg News

Vodafone, Telefonica Win EU Approval for U.K. Mobile Venture

September 05, 2012

Vodafone Group Plc (VOD), Telefonica SA (TEF)’s O2 unit and Everything Everywhere Ltd. won unconditional European Union approval for a joint venture to create a U.K. mobile-phone payment platform, the European Commission said.

EU regulators extended their probe in April on concerns the companies might 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 results of the investigation showed that the joint venture “will not likely lead to a significant impediment to effective competition” in Europe, the Brussels-based antitrust agency said in an e-mailed statement today.

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.

EU approval means the companies can start working on the joint venture by hiring staff and creating the new business, Vodafone, O2 and Everything Everywhere, owned by Deutsche Telekom AG (DTE) and France Telecom SA (FTE), said in a statement.

‘Single Contact’

“The mobile marketing platform is expected to be the first part of the business that is brought to market,” they said. The venture “will provide a single contact point for media agencies, retailers and brands, enabling them to create campaigns that will reach millions of opted-in mobile users.”

Hutchison Whampoa Ltd. (13)’s Three unit raised concerns with the EU last year over the possibility that its bigger rivals could exclude it from the U.K. venture.

Three looks “forward to the invitation to become a customer of the joint venture on the same terms as all participating U.K. mobile operators,” according to an e-mail from company spokesman Guy Middleton.

In the U.S., Verizon Wireless last year blocked Google’s competing mobile-payment system from Samsung Electronics Co.’s Galaxy Nexus smartphone, 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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