Commenting on the Three & O2 merger guarantee, issued by Three’s parent company Hutchison, Ernest Doku, telecoms expert at Uswitch.com, says: “The EU has yet to publish its anticipated objections to this merger, so this is Hutchison trying to get ahead of the game.
“Reducing the UK mobile market to just three big players – one with a market share of more than 40% – would restrict fluidity for bill payers, who can currently save up to £155 a year just by switching when their contracts are up for renewal.
“Even taking Hutchison’s three promises into account, there is a real risk this merger could stifle innovation and competition, reduce the incentive for networks to undercut each other, and lead to less innovative propositions.
“We would need to see more detail on its price freeze pledge, as there remains a question on what will happen to monthly contract prices where networks can potentially hide behind the absorbed handset cost.
“In an ideal world, customers would reap the benefits of both networks. O2 users might get Three’s roaming perks while O2 could boost Three’s customer experience, for example.
“But this has not been promised and it isn’t an ideal world. When Orange and T-Mobile merged, we saw the loss of T-Mobile’s unlimited data deals. This spelled the demise of all-you-can-eat data from a number of other providers, leaving UK mobile customers with fewer options.
“So it’s not surprising that the European Commission is expected to set out its concerns about the potential impact on competition. With its approval needed for the merger, this is far from a done deal. It’s important we get this right and mobile users don’t end up losing out.
“Hutchison committing to an MVNO with a dedicated portion of its spectrum seems the only promise that really tries to address long-term competition concerns, but it remains to be seen if this will really be enough to get the green light.”
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Charlotte Nunes
Phone: 020 7148 4664
Email: charlotte.nunes@uswitch.com
Twitter: @uswitchPR
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