UK: Ofcom chief expresses concern over potential O2 and Three merger

The boss of communications watchdog Ofcom has given a strong hint that she is against the proposed merger between mobile operator O2 and rival Three because it could lead to higher prices and poorer service. If the $10.2bn (£6.6bn) deal goes through, it would make the combined entity the UK’s largest mobile group, with a 40% market share, and would reduce the number of UK mobile operators from four to three.

In a speech on Wedneesday evening to the London School of Economics and Political Science, Sharon White said that with the planned merger of mobile operators O2 and Three, as well as BT’s plan to buy EE going through, there are “risks to consumers and businesses who have enjoyed one of the most competitive markets of recent years”.

She said there was growing evidence to suggest consumers elsewhere are paying the price for mergers, with mobile prices in Austria, for example, rising by 28% after a 2013 deal reduced the number of networks to three. “Light users of mobile – typically that means older people, children and teenagers – have been hit hardest, seeing prices rise by 38%,” she said.

Full content: The Financial Times

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