The Competition and Markets Authority has raised concernsregarding CK Hutchison Holdings Ltd. unit Hutchison 3G UK's acquisition of Telefónica UK'sBritish mobile operator unit O2.

The CMA said April 11 that it believes the merger would giverise to a significant impediment to effective competition in retail andwholesale mobile telecoms markets in the U.K.

While acknowledging the European Commission's efforts inexploring remedies to eliminate any adverse effects of the proposedtransaction, the CMA said the proposed remedies are materially deficient asthey will not lead to the creation of a fourth mobile network operator capableof competing effectively and in the long-term with the remaining three MNOs.

Additionally, the remedies failed to address concernsarising from the presence of the merged entity in both the network sharingarrangements, including the greater risk of coordination that it brings, theCMA added.

Further, the CMA said if a commercially viable fourth MNO inthe U.K. is not ensured then the commission should prohibit the merger deal.The CMA also urged the commission to work to prevent any long-term damage tothe British mobile telecoms market.