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UK Mobile Giant Under Attack ...
(04 Feb 2010, BWCS Staff)The UK's own, and only, mobile mega-merger may be under threat. It emerged today that regulators are to study the proposed tie-up between Orange and T-Mobile, which would create a dominant force in the UK mobile market, before deciding on whether or not it can go ahead. Officials at the Office of Fair Trading are apparently concerned that the deal could push up prices and reduce competition.
Rival mobile companies have been quoted in this morning's newspapers as saying the deal would create a "guerilla" which would have an unfair advantage via its "stranglehold" on 3G spectrum in the UK. A spokesman for the OFT said in a statement, "Our view is that the joint venture threatens significantly to affect competition in mobile telecommunications in the UK." Consumer groups appear to have backed the move.
The OFT has apparently requested that the European Commission refer the case back to the UK authorities over concerns that it will "significantly" reduce competition. If the EC play ball it appears very likely that any OFT investigation will, at the very least, delay the planned merger. The UK's Competition Commission is also likely to step in after the OFT has concluded its study.
Some analysts of the mobile industry believe that the different cultures and management styles found at the parent companies of each of the two operators, France Telecom for Orange and Deutsche Telekom for T-Mobile, could make such a merger difficult to pull off as the two sides struggle to work together. As for their rival operators, on the face of it, Vodafone and O2 have both said they are used to dealing with highly competitive market place.
In a statement, Orange claimed only that the deal would be "good for Britain" and stressed the company was already in close contact with the relevant authorities.
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