2nd March 2010
Consumers could be facing higher mobile phone prices after the
controversial merger between Orange and T-Mobile was approved.
The Office of Fair Trading (OFT) and the EU have given the deal
a green light despite fears that the move could lead to higher
prices and job losses.
The merger between France Telecom's Orange and Deutsche
Telekom-owned T-Mobile will create the UK's biggest mobile firm,
with a 37% market share and nearly 30m customers.
With two companies becoming one, there will be less competition
in the sector and thus bring a risk of higher prices.
Deputy Chief Executive of Consumer Focus, Philip Cullum, said:
"We have serious reservations about the way this approval process
has taken place.
"The potentially far-reaching implications of this deal for UK
consumers should have been examined by UK regulators, as we have
called for, not behind closed doors in Brussels.
Protecting the interests of UK consumers
seems to have taken a back seat on this occasion
"This decision means that we still have a number of unanswered
questions around the impact of the merger on competition... as well
as worries about the broader effects of cutting the number of UK
mobile networks."
Peter Vicary-Smith, chief executive of Which?, said: "We're
deeply concerned with the indecent haste at which the Commission
has approved this deal.
"Protecting the interests of UK consumers seems to have taken a
back seat on this occasion.
"We'll be keeping a close eye on how this merger affects the UK
mobile market in the months ahead but we are concerned that
regulators will be unable to take effective action should
competition be weakened in the future."
The Commission said they are satisfied with Orange and
T-Mobile's assurances that steps will be taken to avoid dominating
their competitors.
The new merged company will give up some parts of the mobile
phone spectrum to rivals.
European Competition Commissioner Joaquin Almunia said: "I am
happy that we managed to resolve the competition issues in this
case quickly."
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