Vodafone

, the largest mobile phone operator in the State, has joined regulator Comreg in

criticising the European Commission's clearance of a €850 million takeover of O2 Ireland by 3.

Vodafone says the deal will “distort” competition in the market, and hinted it may take legal action over the takeover, which was cleared by the commission this week and is due to close within weeks.

3, currently the fourth largest player in the market, dismissed Vodafone’s objections:

“When the dominant number one [player in the market] complains, you know the decision is good for competition.”

Vodafone noted that Comreg, the communications regulator, disagreed with the commission’s decision, albeit the Irish authority has no power to oppose it.

On Wednesday Comreg said the deal could result in “significant negative consequences for Irish consumer welfare” and added that “competition concerns will not be fully addressed” through the remedies proposed by 3.

The Hutchison Whampoa-owned operator has committed to assisting two virtual network operators to enter the Irish market on 3's network, and has also committed to extending an O2 network-sharing deal with Meteor.

“On the basis of the information currently in the public domain, Vodafone also has significant concerns that the proposed remedies will distort healthy competition rather than preserve it, and will act as a barrier to future investment in next-generation communications in Ireland,” Vodafone said.

It added that the remedies accepted by the commission favour “operators who do not invest in infrastructure over those that do”, and said Hutchison would end up in control of too much digital spectrum.

3 said it was “not surprised” about the objections by Vodafone.

It said Vodafone did not complain about companies having too much spectrum “when it held over twice 3’s spectrum capacity over the past decade”.