Ofcom has warned that the proposed takeover of O2 by Three’s owners CK Hutchison could lead to a UK price hike.
The UK regulator’s comments were made in a report that looked at the effect of disruptive firms on mobile pricing across 25 countries from 2010 to 2015.
The report found that, on average, countries that had four or more disruptive mobile networks managed to keep prices low for consumers.
Ofcom said that when one or more of these players were removed from the market, prices increased by up to 20.5%. The regulator compared these findings to the UK market, warning that CK Hutchison’s £10.5bn takeover of O2 will result in a similar price surge.
Ofcom has been publically vocal about the impact the Three/O2 merger could have on competition in the UK, outlining its concerns to the European Commission. CEO Sharon White recently slammed the takeover, with Three owners CK Hutchison responding by promising to not harm UK competition.
Hutch has made a number of pledges in its bid to secure regulatory approval for the takeover, most recently offering 30% of its spectrum to rival mobile networks.