Telefónica y sus socios retan al regulador británico en la compra de Netomnia y no presentan remedios

Telefónica, alongside its partners Liberty Global and InfraVia, have challenged the British regulator, the Competition and Markets Authority (CMA), over the proposed remedies for the acquisition of Netomnia's controlling interest, Substantial. The trio of companies dispute the provisional report issued by the CMA regarding the Netomnia acquisition, claiming it contains significant deficiencies.

The CMA has yet to receive the corrective measures from nexfibre and its shareholders; hence, it has invited other parties with interests in the concentration to submit their comments during the second phase of the operation assessment.

Netomnia's acquisition aims to create a competitor that can challenge Openreach, BT's subsidiary and the dominant player in the UK's fiber network. The deal, pending CMA approval, is valued at £2.0 billion (£2.35 billion), with additional investments of £3.5 billion promised to develop the fiber network. The companies argue that the CMA's report is fundamentally flawed, as its conclusions are based on counterfactuals that do not reflect the actual financial and commercial reality of the UK's fiber market.

Specifically, they point out that the assumption that CityFibre, the third fiber operator in the UK, would acquire Netomnia is not a credible basis for judging the transaction.

CityFibre has suffered significant losses in its last fiscal year and carries a debt of nearly £4.0 billion. The telecom giants contend that since the CMA's report was released on October 2nd, the fiber operator's position has become even weaker due to the BT's acquisition of TalkTalk, which is further contracting the wholesale market.

Moreover, CityFibre's latest accounts raise doubts about its financial viability. The trio emphasizes that the market has changed, and the CMA's analysis must adapt accordingly. They end their letter by extending an invitation to the regulator to work constructively once the report accurately reflects the market's reality.

The move by nexfibre (Telefónica, Liberty Global, and InfraVia) against the CMA is a bold one, with considerable risks, given that nexfibre is seeking the regulator to amend its own submission rather than presenting the remedies demanded by the regulator itself. The CMA has previously warned that it could block the acquisition if no measures are presented to alleviate the supposed damage to competition. The regulator is expected to decide on the authorization or blocking of the operation by December 15th.