French telecom group Iliad eyes UK's mobile market - FT

(Reuters) - French billionaire Xavier Niel's telecoms group Iliad has approached the UK telecoms regulator to express a "preliminary" interest in entering UK's mobile market, the Financial Times reported, citing people familiar with the matter.

Iliad's interest to enter UK's mobile market and create a new network operator would depend on the acquisition of telecoms infrastructure as a result of the 10.5 billion pounds ($14.96 billion) O2-Three merger, the FT said. (http://on.ft.com/1UmycR6)

The merged company formed by the O2-Three deal would own half of Britain's most attractive mobile spectrum in the so-called low-frequency bands, which allow operators to cover long distances more cost-effectively, according to Moody's. It would also own 37 percent of the spectrum in high-frequency bands above 1800 megahertz.

It is expected that European Commission antitrust regulators would require the merged entity of O2 and Three to shed some of its parts, in order to create a new competitor, or guarantee access of its network to rivals, as the UK market consolidates from four to three operators, the FT reported.

However, EU regulators have been of the view that consolidation in the telecoms sector was "not necessarily the answer".

European Competition Commissioner Margrethe Vestager scuppered a deal between TeliaSonera and Telenor in Denmark last year over concerns it would lead to higher prices for consumers, the first time such a deal had been blocked since telecoms companies began an M&A spree in 2013.

A similar deal acquisition between Orange SA and Bougyues Telecom is expected to be vetted in France, sources told Reuters last week.

France's largest telecom company Orange has already started informal talks with rivals Numericable-SFR and Iliad

Iliad and Ofcom could not be reached for comment outside regular business hours.

($1 = 0.7018 pounds)

(Reporting by Ankush Sharma in Bangalore, editing by David Evans)