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Will network consolidation hurt consumer choice?

Friday, March 28th 2014 by Cable.co.uk
Will network consolidation hurt consumer choice?
The end of Orange and T-Mobile signals a further contraction in the number of network options for UK consumers.

The inevitable has finally happened – EE has stopped selling Orange and T-Mobile plans online.

Consumers can still sign up with the brands if they so desire, either by popping into a high-street store or calling the sales team, but it still feels like the end of an era. The two networks merged in 2012, bringing the number of operators on the UK market from five to four and beginning the meteoric rise of the country's pioneering 4G provider. But until now, they still served loyal subscribers and accepted new sign-ups on their respective plans.

As we witness signs Orange and T-Mobile are finally being subsumed into the EE behemoth, it's worth reflecting on whether or not Britons really get much choice when it comes to their carriers. To be sure, there are still mobile virtual network operators (MVNOs) on the market, but it's clearly the big four calling the shots. An example of this came last week, when ad-supported MVNO Ovivo shut down without warning – the result of higher-ups at Vodafone pulling the plug, according to Mobile News.

The situation is comparable in the fixed-line broadband market, where we can effectively only choose between BT – whose infrastructure is used by Plusnet, TalkTalk and Sky – or Virgin Media. There are alternatives available such as satellite-based connectivity, or indeed, using EE's 4G network for home broadband – but should the pickings really be so slim in the first place?

Unfortunately, things might get worse before they get better. Over in Ireland, Three is currently attempting to acquire O2, which would bring the country's number of networks down from four to three. It's proposed it could help to set up a new Irish MVNO in a bid to quell the concerns of the European Commission, which rightly worries the move will harm competition, but is this really enough?

Should the takeover goes through, it's not impossible Hutchison Whampoa – Three's Hong Kong-based parent company – could attempt the same here in the UK. In fact, the possibility was mooted by Chief Executive David Dyson in a December 2013 Guardian interview: "Under the right circumstances the UK could operate competitively with three or with five [network operators]," he said.

But could it really, or will consolidation continue to hurt consumer choice?

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