Ofcom standing firm in face of proposed Three and O2 merger

Ofcom standing firm in face of proposed Three and O2 merger

​The ongoing row involving Three's proposed takeover of O2 continues to rumble on.

The beginning of February saw the head of communications regulator Ofcom Sharon White write to the Financial Times in an attempt to drum up opposition to the move.

Ms White's opposition to the £10 billion deal was first revealed back in October, arguing that cutting the number of UK networks from four to three would substantially damage the levels of competition in the market and leave consumers worse off.

She also dismissed the suggestion that larger companies would lead to greater investment, adding that “competition, not consolidation, has driven investment".

Analysts have already echoed Ms White's fears that a reduced number of competitors would also see customers facing higher bills.

She added that Austria, which has similarly seen the number of networks go from four to three, has already seen mobile prices rise by 15 per cent.

As well as potentially higher prices, Ofcom is also reportedly concerned about the move disrupting existing UK network arrangement and a “shift in the balance of power” between operators and independent retailers.

In her letter to the Financial times, Ms White said: “We are concerned that the smallest mobile network, Three, proposes to become the biggest by acquiring its rival O2.

“Many of our concerns relate to competition between operators who own the networks on which mobile phones rely.

"Only these four companies can make your mobile signal faster, more reliable and widely available. Establishing a new mobile network might be one answer, but this would take time, and considerable investment."

She added that while a review into the merger is ongoing, Ofcom was set to continue working towards promoting a healthy rivalry between industry operators.