Ofcom warning on O2 and Three merger
There's some concern over Three's handling of their legacy customers, who could see their bills being whacked up by the mobile company. It isn't looking good elsewhere either, as the proposed merger of O2 and Three could see other people's bills increasing too, according to Ofcom’s chief executive.
Sharon White thinks this merger could hinder competition, and that the regulator has already made their case about it to the European commission, who are going to review the situation.
You may recall that Three's owner, Hutchison, agreed last year to buy O2 from Telefonica, in a deal worth somewhere in the region of £10bn. However, last Autumn, the Competition and Markets Authority asked the European commission to investigate the deal.
Writing for the FT, Sharon White said that this newly merged company would control two in five mobile connections, reducing the number of available networks to three (the others being EE and Vodafone). This could see a number of problems, the main one being higher costs for customers.
She said: "We are concerned that the smallest mobile network, Three, proposes to become the biggest by acquiring its rival O2. Many of our concerns relate to competition between operators who own the networks on which mobile phones rely. Only these four companies can make your mobile signal faster, more reliable and widely available. Establishing a new mobile network might be one answer, but this would take time, and considerable investment."
"While the merger is reviewed, Ofcom will keep working to promote healthy rivalry between operators. We want UK consumers and businesses to enjoy fair mobile pries and cutting-edge products for years to come. For that we need strong competition: the basis of protection and the incentive to progress."
Hutchison have said, in defence of themselves, that this move is a bid to stay competitive with the merging of BT and EE. We'll have to wait and see how this transpires.