MSE News: Mega merger between Three and O2 blocked amid price rise concerns

MSE_Luke

A multi-billion pound merger between O2 and Three has been blocked over concerns about potential customer price rises...

Read the full story:
'Mega merger between Three and O2 blocked amid price rise concerns'

Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.

torbrex

and today O2 announced that their PAYG prices are changing later this month.

Ian011

The reason cited was 'competition'.

Competition isn't working. When one network raises their prices, all of the others follow. Competition is supposed to bring prices down.

Ectophile

"Competition" just means you match your prices to everybody else's.

If you cut your prices, then all your competitors would have to follow suit. Once they have done that, you won't attract any new customers. Instead, you've just lost profits by cutting prices.

sdduk

I can understand UK not wanting it and stopping it going though but whats it got to do with the EU?:mad:
I think the quicker we leave the better off this country will be.

jobdone1

So what's the difference with the Ee merger ???,

wongataa

jobdone1 wrote: »

So what's the difference with the Ee merger ???,

EE and BT mainly operated in different areas. EE didn't have much landline market and BT didn't have much mobile market, so when they joined there was little reduction in competition overall. As O2 and 3 operate in the same market (mobile telecoms) having them merge definitely does reduce the available competition.

ChiefGrasscutter

The rational between the BT/EE merger being allowed was that it did not reduce the number of mobile phone companies in the UK as BT does not have a mobile arm.
A merger between Three and O2 would reduce the number from 4 to 3

As per my comment on the other thread, time will tell whether the UK is large enough to sustain 4 mobile networks as now seemingly demanded by the EU.
If not then one of them will eventually wither and die being left on some minimal maintenance basis.
This sort of thing happened to a division within a company I worked for. Eventually most the staff left to work for the competitors and finally it was closed down and the rest made redundant. Effectively they had "sold" the division to the competitors but got no money for it.

Anyway its just yet another reason to vote leave - the EU interfering in our business.

redux

ChiefGrasscutter wrote: »

Anyway its just yet another reason to vote leave - the EU interfering in our business.

The UK regulators recommended against the merger, and the EU authorities backed them up.

What difference could not being in the EU have possibly made to this decision?

Gigabit

All not being in the EU would have done was to get to the decision quicker. It's good IMO to have multiple authorities coming to one reasoned, correct decision.

ChiefGrasscutter

redux wrote: »

The UK regulators recommended against the merger, and the EU authorities backed them up.
What difference could not being in the EU have possibly made to this decision?

The UK regulators will have had unofficial discussions with the EU regulators - of that I'm quite sure.
When the EU unofficially indicated that they were most likely to block it then OFCOM would have rapidly come to the same conclusion.
Its a bit like you knowing what you boss is going to say about some plan and rapidly decide to toe the line and hurriedly agree.

This way we don't get into a disagreement between the EU/OFCOM and HMG can spout some guff about how it all shows how we are working together.

Unfortunately it means that OFOM is most likely to be singing to the tune of the EU and what the EU wants rather than focusing its attention where it should be - on what the UK market wants.....which is some mega player to compete with the might of BT/EE.

Incidentally the Telecoms EU Commissioner seems to agree with my viewpoint from his previous statements about mega players being essential but was presumably overruled/outvoted/stabbed in the back by the competition commissioner.
http://uk.reuters.com/article/europe-telecoms-consolidation-oettinger-idUKF9N0ZM00J20151028