02-Three Merger Strongly Opposed by UK Regulators

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It seems that mega-mergers are all the rage these days, and the acquisition of telecoms giant O2 by rival Three in the UK would be no exception.

The deal has been on the table since last year and has attracted both praise and concern. The latest to raise their voice against the deal is the head of the telecoms regulatory body in the UK (OFCOM), Sharon White, who has come out strongly against the deal on concerns that it could lead to steeply increased phone bills for customers.

White believes that for a healthy market to continue to operate there need to be at least four carriers. The O2-Three merger would see two of the biggest mobile providers in the UK merge, controlling more than 40% of the market.

While White acknowledged that consolidation has benefits, in theory, she went on to say that she believed competition was the key to attracting new investment and keeping prices low.

The $15.6bn deal would see the number of providers cut from four to three, which White believes is under the minimum number needed to keep markets healthy. She claimed that this is a crucial time for the telecoms market, and warned that the scale of the mergers seen in the past year would be greater than the changes seen in the past decade combined.

The EC must decide before October 30th, 2016 whether to allow the Competition and Markets Authority (CMA) to investigate.

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