[gunner45]

Originally Posted by Chrysalis

To be fair to the CMA its not their responsibility to keep VM afloat or for people to keep their jobs, these jobs would have gone regardless, the merger may have delayed it. But I have never seen a merger that doesnt involve job losses, that would be a new thing if that was the result.

The CMA need to look at the resulting competition, and here is my 5 pence on the issue.

VM have a poor record of being competitive, their one advantage was they had for a while a superior technology over the copper DSL competition. Thats it really, they treated loyal customers poorly, didnt wholesale their network, routinely for years on end left areas with very visible congestion knowing that the customers had a choice of that or slow DSL.

BT/Openreach even if is as a result of Ofcom intervention, wholesale'd both the local loop and core network. Reacted to alt net competition by doing a national rollout, this FTTP rollout was also available to wholesale partners.

VM and its partner invested in a new Nexfibre company, a limited rollout was started with similar ambition to CityFibre a completely new player, unlike CityFibre there was no wholesale, the only other ISP was GiffGaff owned by the owners of VM.

They reacted very differently to OR on the alt net threat by tabling a over priced bid designed to kill the competition, American style. This bid coincidentally shortly after CityFibre and Netomnia were in talks of a merger.

If the CMA has competition and customer's at its forefront, the logical move would be to block the anti competitive buying out from Nexfibre, and instead promote the CityFibre/Netomnia merger which was a more natural progression in the market, both networks tiny over lap, and the combined size of them would result in a lng term player in the market.

The resulting competition is much better with the latter, as CityFibre already have an established wholesale market. So people in the affected areas, would have an extra 20 or so ISPs to choose from, and the likes of Sky, Zen etc. would have a choice of two wholesale providers instead of just Openreach.

This is the view point when you try not to tint it with sorrow for VM job losses, and those who were hoping to make a quick buck from the VM bid.

But the CMA havent rejected the deal yet, this could be a starting negotiation point, especially if the government step in stating they would prefer this buy out to go ahead.

The threats from LG and VM ceo's made one thing very clear, they dont like being in a competitive market, so they threatened to back out of any investment unless they had a dominant market.

We need to take a realistic view of CityFibre: like most altnets it's in trouble, struggling with a debt pile of £3.8bn and needing its creditors to take a severe £2bn 'haircut' to get its £900m shareholder loan to survive. In all likelihood those creditors will choose the least undesirable option: walk away from a big part, like £1bn, but demand a debt-for-equity swap for the remaining £1bn and take control of Netomnia. The strategy will then be to stabilise, scale and sell the business within a 3- to 5-year window. Commercial debt syndicates are not long-term infrastructure operators like InfraVia which is funding the nexfibre bid to buy Netomnia: converting debt to equity is not easy as it incurs heavy regulatory capital charges but it is a protective measure to take control, cut cash burn, clean up the capital structure, and engineer a profitable exit. It's not credible at all that these new shareholders will attempt to buy Netmonia for which nexfibre bid £2bn.

The CMA should realise that CityFibre buying Netomnia to become a major competitor is just fantasy and allow the nexfibre deal.