Ofcom’s CEO Sharon has publically revealed the regulators opposition to the proposed takeover O2 by Three’s owners Hutchison Whampoa.
Writing in the Financial Times Sharon White said that Ofcom was concerned with the number of customers the new business would command and the possible effect this would have on pricing.
‘We are concerned that the smallest mobile network, Three proposes to become the biggest by acquiring its rival, O2’ she said ‘the combined group would control more than four in 10 mobile connections.
‘This follows a pattern of mobile mergers in Austria, Ireland and Germany. Like those countries, the UK would be left with just three networks. Some argue that operators must consolidate in order to boost revenues, increase efficiency and widen their scale to invest.
‘But this is not a broken market. Last year, UK mobile companies generated £15bn of revenue. They have been investing billions to roll out 4G technology, while maintaining cash flow margins above 12 per cent. Competition, not consolidation, has driven investment.’
‘We have put those arguments to the European Commission, which is reviewing Three and O2’s proposals, and outlined particular concerns.’