Ofcom chief warns on mergers

Ofcom chief warns on mergers

The chief executive of UK regulator Ofcom Sharon White has expressed concern over the proposed merger between O2 and Three.

White said that the planned merger of O2 and Three, as well as BT’s acquisition of EE, will bring risks to consumers and businesses in one of the most competitive markets in recent years.  

"Consolidation can in theory have benefits - improving economies of scale and making it easier to finance investment. However, Ofcom's experience is that competition, not consolidation, drives investment and delivers low prices," Ms White said.

The proposed £10.2 billion acquisition of O2 by Three would reduce the number of mobile networks from four to three in the UK. 

“We continue to believe that four operators is a competitive number that has delivered good results for consumers and sustainable returns for companies,” said White.

“I am concerned that the UK could end up with more concentrated markets that lead to higher prices and reduced choice for consumers, without the promised boost to investment and innovation,” she added.

Last week EU competition commissioner Margrethe Vestager cautioned against phone mergers in the EU, saying that consolidation could lead to higher prices for consumers without boosting investment in networks. 

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