Telecoms regulator Ofcom has come out against a planned merger of O2 and Three by calling on European authorities to block the tie-up on competition grounds.
This follows fears that the combined entity would monopolise mobile phone services in the UK by shrinking the number of large competitors from four to three, enabling them to raise prices for consumers.
Outlining the rationale, Ofcom chief executive Sharon White told the FT: “The merger of two of Britain's four operators could also hit rival high-street retailers and upset existing network arrangements.
A formal statement of objections will be sent to both Three and O2 outlining Ofcom’s concerns but final approval will rest in Brussels where authorities are currently examining the case for a deal in detail.
Britain’s telecoms market is in a state of flux at the moment following the recent merger of BT and EE together with indications from IIiad that it may enter the UK market if the opportunity for a fourth network arose.
Such a move, if it happens at all, would take ‘time and considerable investment’ to take effect according to White who warns that such a decision alone was not sufficient in and of itself to allay Ofcom’s fears.