Three Ireland says it is working with the European Commission on its proposed acquisition of O2 Ireland. Three says it has received a Statement of Objections from the Commission which sets out concerns in relation to the proposed acquisition of its rival.

In a statement Three Ireland said "We are analysing the Statement and we will be responding to the Commission's concerns".

Three has claimed that without its acquisition of O2, a gap between - what it calls "one clear dominant market leader" - and other operators will increase.

It claims that any such acquisition will provide "financial strength necessary to compete aggressively in the market to the benefit of Irish consumers".

Three adds that it will put forward "strong and effective remedies" to address the concerns of the Commission.

Authorities in Brussels said back in November that the takeover could reduce competition for mobile phone services.

It also said that 'virtual networks' like Tesco Mobile would also have fewer options when choosing a host network for their services.

The Commission has until the end of March to decide whether it will block the takeover.

O2 was bought by Three in a deal worth up to €850 million in June of last year. Three paid €780 million up-front, and will pay a further €70 million depending on the financial performance of O2.

O2 is owned by the Spanish telecoms company 'Telefonica'.

The combined companies have nearly two million customers and a 37.5% share of the mobile market.