Ofcom softens opposition to mobile phone operator mergers

theguardian.com:

The telecoms regulator has dropped its long-held belief that a merger between any of the UK’s big four mobile operators should be blocked at all costs, raising the possibility of a mega merger between Vodafone and Three UK.

Ofcom previously maintained that such a reduction in competition would lead to higher-priced phones and bills for consumers and businesses.

Under the former chief executive Sharon White, Ofcom was an outspoken opponent of Three UK’s attempted £10.25bn takeover of O2, which was blocked by competition regulators six years ago. Ofcom said on Tuesday it has now “clarified its position on mobile consolidation”.

Months before the deal was blocked, White, who is now the chair of the John Lewis Partnership, delivered a scathing speech attacking the deal, saying that a move from four to three main players would “shift the balance of power” in the market.

“Competition is the lifeblood of today’s telecoms market, spurring innovation, better coverage and fair prices,” she said. “The deal could mean higher prices for consumers and businesses.”

The UK’s Competition and Markets Authority, to which Ofcom feeds market data and views on any takeover, and the European Commission both subsequently agreed that the deal should be blocked.

Ofcom has previously explicitly stated in its annual plans that the UK market needs four leading mobile players to operate efficiently.

On Wednesday, Ofcom softened its outright opposition to such a prospect in today’s market, saying: “Our stance on a potential merger would be informed by the specific circumstances of that particular merger, rather than just the number of competitors.”

The shift in position will be welcomed by the Vodafone boss, Nick Read, who is under pressure to improve the