EU clears Carphone's buy of AOL unit

• IBTimes RSS
• Print
• E-Mail
• digg
• Del.icio.us

"The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area," the European Union's top competition authority said in a statement.

Carphone, Europe's top mobile retailer, said the 370 million pound deal would give it an extra 1.5 million broadband customers and add 10 million pounds to pretax profit this fiscal year.

The firm, which sparked a fierce price war in April with a "free broadband" offering for people signing up for its TalkTalk fixed line service, is in the midst of an aggressive plan to "unbundle" 1,000 telephone exchanges of rival BT Group Plc to give it greater freedom to price its services.

Carphone said the deal would further improve the economics of unbundling and saw significant operating efficiencies in relation to network infrastructure and marketing costs.

Until Carphone unbundles BT lines and can offer its own broadband product, it is forced to provide them BT wholesale broadband and continue making losses. Connections only become profitable when customers use Carphone's own broadband product.

Only 20,000 of Carphone's 625,000 broadband customers were on unbundled lines at the end of the second quarter.

The addition of AOL's customer base to its own will give Carphone an 18 percent share of the UK broadband market, behind BT's 20 percent share and cable group NTL's 26 percent.

AOL UK was the last of the U.S. group's European units to be sold. It has already sold its French access business to Neuf Cegetel and its German business to Telecom Italia.