Cable.co.uk comments on O2 and Three merger being blocked by the European Commission
- Proposed merger of mobile operators O2 and Three has been blocked by the European Commission
- The Commission had concerns UK mobile customers would have had less choice and paid higher prices if O2 and Three formed a single company
- The ruling will prevent consumer mobile contract prices from spiralling out of control, says Dan Howdle
Wednesday 11 May 2016: The European Commission has confirmed today that it has blocked the proposed acquisition of O2 by Hutchison (owner of Three) to create a single mobile operator.
The Commission, which has been investigating the proposals since October 2015, had strong concerns that UK mobile customers would have had less choice and paid higher prices as a result of the takeover, and that the deal would have harmed innovation in the mobile sector.
The decision follows research by Ofcom published in March which suggested that the cost of mobile phone contracts could increase by up to 20% if the merger of O2 and Three went ahead.
Commenting on Ofcom's findings, Dan Howdle, consumer telecoms expert at broadband comparison site Cable.co.uk, said:
“When EE was formed from Orange and T-Mobile in 2010 it reduced the number of network operators in the UK from five to four, a number still regarded by Ofcom and the European Commission as able to provide a competitive enough marketplace to ensure reasonable pricing to UK mobile customers.
“Unfortunately, research by Ofcom has suggested that a reduction of four network providers to three will potentially send mobile contract prices skyrocketing.
"Likely, this will feel staggeringly unfair to O2 and Three, having watched as Orange and T-Mobile were allowed to do exactly what they are being denied, and then go on to become the dominant force in the UK mobile market.
“This ruling will almost certainly prevent any future merger attempts by UK network operators."
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Dan Howdle has been plugged into the attitudes of UK broadband, TV and mobile customers for over two decades, running research fieldwork both nationally and internationally on behalf of the biggest players in the industry. Dan is now consumer telecoms analyst at Cable, as well as more formally operating in the role of its Director of Communications and Content.
An experienced broadcaster, commentator and writer, Dan has appeared on BBC TV and radio, ITV, Sky and in the national papers. Dan has advised Ofcom on issues surrounding service quality, administered Cable’s Broadband Service Quality Awards and sat on the panel of judges for the Internet Service Providers Association annual awards.