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Major phone merger questioned by OFT

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Two of the country’s biggest mobile network providers, Orange and T-Mobile, have announced a market-changing merger but an investigation by the Office of Fair Trading (OFT) may derail the deal.

Orange and T-Mobile, the third and fourth largest mobile telephone providers respectively, will grab a market-leading 37% share when they join forces. But the OFT has asked the European Commission to transfer the case to UK jurisdiction as the merger could “significantly reduce competition”.

Mergers that initially fall within the jurisdiction of the EU Merger Regulation may be referred to the UK to be examined by the OFT under the Enterprise Act.

The possible investigation could delay the merger by almost a year as the Competition Commission would also need to examine the legitimacy of the pact.

Consumer groups have welcomed the OFT’s call for the investigation to be brought to the UK.

Peter Vicary-Smith, Chief Executive of Which?, said: “It’s only right that a deal affecting UK consumers should be scrutinised by UK regulators. This merger will clearly have a huge impact on the mobile market, since it will form the biggest mobile operator in the UK and bring the number of networks down to just four.”

But Orange and T-Mobile have maintained that the proposed deal would benefit the market. In a joint statement, the pair said: “We are in close contact with all of the authorities involved, including the OFT and Ofcom. We strongly believe that the proposed merger is good for Britain and will continue to work closely with all interested parties.”

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Written by Andrew Hodges

February 6, 2010 at 6:42 pm

Posted in Comment, LinkedIn

Tagged with , ,

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