EU vetoes O2 and Three merger: Hutchison mulls legal challenge

Hutchison is considering a legal challenge against the EU over its decision today to block the proposed £10.25bn merger between mobile operators Three and O2. "We will study the commission’s decision in detail and will be considering our options, including the possibility of a legal challenge," said Three's owner Hutchison in …

[Sir Sham Cad]

Paid higher prices as a result

Too late, 3 have already done that prior to this decision in order to get the 5 years of price hikes in early. They've already squeezed their extra cash from the customer only now they get to spend it on lawyers instead of bonus^W infrastructure invesntment.

[AMBxx]

Message to 3

The British said no. The Europeans said no. I'm an O2 customer and I say no.

Take the hint.

[Big_Ted]

Re: Message to 3

I'm a three customer and I say yes.

Take my hint my network operator has more money, O2 owner not interested in spending any. . .

[Chloe Cresswell]

Re: Message to 3

I was a 3 and O2 customer (backup and primary phones).

Now I'm an EE and O2 customer (backup..)

I loved the idea of going from a £18 to £33 contract, while losing facilities, where as the £19 offering would have been a much better match to my usage.. but no, 3 said the £33 had been recommended because of my usage patterns (very few calls, 4 or so SMS a year, all data and tethering usage of around 7GB a month).

So I left.

[djstardust]

It's a cartel anyway ......

Can't really see what difference this would have made. The big 4 operators pricing is pretty similar anyway. Three used to be considerably cheaper than the others but not any more. They all know what each other's tariffs are and mirror them.

Customer service is universally poor and just like the energy industry one leaves and another one joins. No incentive for the networks to improve as they all just play the same game.

[BigAndos]

Re: It's a cartel anyway ......

Yeah there is almost no competition these days. The only differentiation is network coverage, I tend to use whichever operator has the best signal where I happen to live/work.

[Big_Ted]

Re: It's a cartel anyway ......

That's right, they all offer true unlimited downloads on the best plans just like Three do....

Oh wait a minute, no they don't, the nearest is BT Mobile that offers unlited WiFi with their SIM plans.

Its one of the reasons I am with three, no need for home broadband or landline.

[Chloe Cresswell]

Re: It's a cartel anyway ......

What unlimited downloads?

I had that on 3, for £18. then I got a letter..

Unlimited data (on the handset) with 12Gb tethered, for £33.

[Danny 14]

Re: It's a cartel anyway ......

I thought it was unlimited (as long as you stay under 2gb)

[adam payne]

EE / T-Mobile merger is fine. BT taking over EE is fine, even though BT are known for their Anti-competitive practices and generally poor customer service.

The O2 / Three merge isn't allowed even when they want to invest billions.

The EU regulators need to be more dog.

[Peter 26]

If Three had tried the merger before the BT-T-Mobile merger, would they have been allowed?

I don't think either merger should have been allowed. BT is heading towards a monopoly in every area, Internet, TV and now mobile phones. They seem to be unstoppable.

[I ain't Spartacus]

I don't think BT-EE was so much the problem. As BT didn't have their own mobile operator. But Orange and T-Mobile maybe shouldn't have been allowed to happen. That rocketed EE to being by far the biggest provider, and at the time 3 were way behind the big 4, and also EE ended up with a huge monopoly on spectrum. And were then outrageously allowed to launch their 4g service on the virtually free spectrum they had from way back in the 80s/90s - while others didn't have enough to launch and had to wait for the auctions.

But Ofcom were singing the praises of having 4 operators before 3 came into the market. I remember reading a piece years ago about how Ofcom thought our mobile market was superior to the rest of Europe, as many of them only had 2 or 3 operators, and Ofcom didn't want us to go below 4. I guess that's still their thinking?

[Chloe Cresswell]

making EE from orange and t-mobile went from 5 networks to 4.

BT taking EE went from 4 networks to.. 4.

if EE hadn't been formed and we still had T-mobile and Orange networks, I expect the 3/O2 would have gone though.

[streaky]

EE / T-Mobile merger is fine. BT taking over EE is fine, even though BT are known for their Anti-competitive practices and generally poor customer service.

The O2 / Three merge isn't allowed even when they want to invest billions.

The EU regulators need to be more dog.

Yep. This. Right here.

EE from T-Mobile/Orange was on the same level. BT/EE takeover is about 100x worse in terms of consumer harm and nobody (in the UK or EU competition authorities) bats an eyelid.

The whole thing is massively shady honestly - here was me thinking that the EU was TRYING to create a pan-EU state monopoly to stomp round the world breaking markets and killing competition; they allow two successive mergers that lead up to this (involving the "former" German state monopoly both times) and then any time anybody does the same they completely freak out.

Unprovable but the whole thing stinks of being.. what's the expression.. "fantastically corrupt". If they're doing this they need to unpick the EE/BT deal for anybody to have any confidence.

[Graham Jordan]

Dam

As a 3 customer, I've been hoping this would go through.

3's data rates are superb, best out of every network I've been on. But the black spots are big and plentiful. Was really hoping this merge would help fix it.

Dang

[Peter 26]

Re: Dam

Not any more they aren't, check out the latest prices they hiked in case they had to freeze them for five years...

[TonyJ]

Re: Dam

"...3's data rates are superb, best out of every network I've been on. But the black spots are big and plentiful. Was really hoping this merge would help fix it...."

Hate to burst the bubble, but my experiences on O2 suggest that this wouldn't be the case.

I had awful connectivity in a lot of places you really shouldn't be struggling.

To the point I used to have a Three one plan SIM on a rolling 30 day contract purely to use as a mobile hotspot (until they decided they wanted to increase the price and cap the "unlimited" data via tethering).

Three - the worst customer service I've ever encountered;

O2 - had good business customer service until they shipped it off to Azzuri then it went downhill rapidly, as did the benefits of being a business customer

EE - had a few misgivings going to them but (touch wood) they have UK-based business support, great speed and coverage and good data capacities

I am actually nervous about the move to BT. From my perspective, it can only go downhill.

YMMV of course.

[Anonymous Coward]

Re: Dam

I've been with all of them over the years, and even done IT consulting work with three of them!

Three - network ok ish, customer service awful. Head office a bit shambolic.

O2 - network good in some areas poor in others, service poor. Better off getting Tesco mobile who have excellent service.

Vodafone - network dreadful, lucky to get 3G outside of a city. Service dreadful and expensive to boot. Head office a bureaucratic nightmare - polar opposite of three's slightly organised chaos.

EE - my current network. network very good indeed, I've gotten 4G in some unlikely places. Service mixed - they try hard if you contact them via social media but it just doesn't glue together. Bit expensive. Head office seemed extremely political and wasted a lot of time infighting after Orange / T mobile merger.

[Michael Jennings]

Re: Dam

T-Mobile once belonged to Mercury/C&W (mostly). Then was sold to Deutsche Telecom.

Orange once belonged to Hutchison. Then was sold to Mannesman. Then was sold to France Telecom.

Freeserve once belonged to Dixons. Then was spun off as an independent company. Then got bought by France Telecom and became Wanadoo. Then become Orange Broadband and ultimately EE broadband.

Orange was then merged with T-Mobile to become Everything Everywhere and then EE.

Now the whole thing has been bought by BT. At this point the resulting entity has bits of the corporate cultures of all of the above, seemingly contantly at war with one another.

[AMBxx]

Re: Dam

As on O2 customer, I was hoping for O2's customer service with Three's network coverage. Then O2 outsourced all their customer support to Crapita. Not sure what to do now.

[Chloe Cresswell]

Re: Dam

I work in the north lincolnshire area, I used to carry an O2 and a 3 phone.

3 for data, O2 for calls because 3 had coverage till you walked into a client's building.

O2 would just drop to 2G, but atleast it worked.

[Danny 14]

Re: Dam

Vodafone are bad but up here in the lakes they are about the best for reception. Hobsons choice really.

The irony is getting isle of man roaming in some parts.....

[ShortLegs]

Double damn

As an O2 customer (GiffGaff) I was hoping this would go through. O2's network coverage is crap in Glasgow, non-existent in Cumbria, and appalling along the M6 from Crewe northwards... Dialling a number has my screen dialling.... dialling.... dialling... before it finally manages to connect and actually dial the number. Data rates are non-existent, and call quality is awful.

O2 are not prepared to invest in the network, and do not want to know about issues. Both they and Giffgaff blame the handset, and ignore the fact that I've tried different SIMs and different handsets, all with the same results.

Yet EE can merge with T-Mobile, and then be bought by BT...

[Vitani]

Re: Double damn

Orange & T-Mobile were allowed to merge because it still left 4 mobile networks, O2 & Three merging would leave only 3. If It had happened the other way around we'd have "Ozone" (O3), and EE wouldn't be be allowed to happen. BT don't own a network (they sold O2 years ago), so them buying EE doesn't reduce consumer choice.

[Colin Ritchie]

Re: Double damn

I'm a GiffGaff customer also, I'm fine with O2 being a different entity to 3.

In the past, everytime my broadband ISP has been merged with another service, it has deteriorated in service and added complexity or expense or both.

Merger timeline: Toucan > Tiscali > Pipex > TalkTalk, bugger this, off to BT Infinity.

This experience may have coloured my judgement on mobile contracts too:

I moved from T-Mobile to GiffGaff when EE turned up and wanted to muck my PAYG phone account about.

[Andrew Jones 2]

Re: Double damn

"Merger timeline: Toucan > Tiscali > Pipex > TalkTalk, bugger this, off to BT Infinity."

I feel you :-

Freedom2Surf > Pipex > Opal (who?) > Tiscali (urgh, really?) > Talk Talk (oh god here we go).....

Isn't it funny how the EU and OFCOM are concerned about the number of mobile networks but don't seem the slightest bit bothered that it's been getting increasingly difficult for the last 6 years to get hold of a nationwide broadband provider who isn't from the one of the big players....

We too ended up going to BT because, at least you get the impression that you might get decent customer service and pretty good reliability....

[Big_Ted]

WTF are they on ?

How could a five year price freeze and billions spent on infrastructure not safeguard customers against price rises and improved service.

I want to know the real reason this was blocked not the nonsense they have given. As a customer 5 years with no price rise, bigger coverage and shared coverage with O2 would have been nothing but wins.

Seriously does anyone out there think it makes a bit of difference to Vodafone and EE re their prices when compared to 2 smaller networks, if the comparison was with a big network then they would be forced to keep their prices down as well. 3 big or 2 big and 2 small networks it makes no difference to compition.

[Aristotles slow and dimwitted horse]

Fud!!!

"We strongly believe that the merger would have brought major benefits to the UK, not only by unlocking £10bn of private sector investment in the UK’s digital infrastructure but also by addressing the country’s coverage issues."

Which based on previous mergers directly correlates to higher customer bills and less ability for those customers to directly complain about them.

[Big_Ted]

Re: Fud!!!

How can a five year price freeze = higher bills ? ? ?

[AMBxx]

Re: Fud!!!

They put the prices up already.

[Big_Ted]

Re: Fud!!!

Not that I noticed, I am paying the same as I did a year ago and my tethering allowance has gone from 2GB up to the current 30GB allowance (latest allowance) with a simple online chat request.

[tin 2]

Re: Fud!!!

Well you're the lucky one then, mine was put up more than 100%, as were many others. Just because it didn't happen to you doesn't mean they aren't doing it.

TBH the only thing keeping prices where they are is the competition. BT weren't a mobile provider so on one level that's OK. They're also keeping Sky on their toes so that's useful for the consumer too.

[Franco]

Re: Fud!!!

Wait until your contract/minimum term is up. Mine just expired and they tried to move me from £6.90 a month to £15 as it "better fit my usage patterns" apparently. When I phoned up to quit they admitted there was the same package as I already had but at £7.99 a month.

[Anonymous Coward]

Three bought O2 in Ireland and it wasn't great...

Some O2 customers were mandatorily moved to a new Three tariff, losing perks and price plans that had been in place years. They also ended up paying more with useless Three customer service in India. In addition some O2 masts were decommissioned and others merged into Three's network, meaning that network coverage actually degraded for some - they lost the nearby O2 mast and were pushed onto an over subscribed 3G mast further away. Overall O2 customers generally got the rough end of the deal.

Add to that the MVNOs that used to mast share with O2 still have not been fully integrated into the Three network. My coverage has degraded on a MVNO as it constantly jumps between Three and O2 legacy masts, leading to dropped calls.

Since there was now one less mobile phone carrier Three then increased their prices while the regulator just stuffed the brown envelope in his pocket no doubt...

Bad news for the consumer really.

[SundogUK]

Hypocrites

Really, the EU veto's a merger which would bring the number of UK operators down to three - the same as Germany has...

[tin 2]

Re: Hypocrites

Maybe they have seen that it was shit and therefore have steered away from making the same mistake again. Possible isn't it?

[MarthaFarqhar]

Re: Hypocrites

You are assuming that the EU has the ability to learn from its own mistakes and make better choices.

[Anonymous Coward]

At least the van driver is happy....

... the van driver that takes all of the UK generated profits from O2 UK, and drives them to Spain each night. It's strange, the money that comes the other way from Spain to O2 UK for investment can fit in a small brown case, and is delivered once a quarter.

[Engine Room Architect]

Re: At least the van driver is happy....

I'm not sure the van driver will be that happy. He'll have paid a fee to submit his van driving quote into their procurement system and he'll have to pay 4% of the value of his contract back to Telefonica to fund their huge procurement department. He'll have been squeezed dry through endless rounds of price negotiations ultimately leaving the poor driver with next to nowt - when they do eventually cough up 120 days after being invoiced.

[MR J]

Once BREXIT happens then we can enjoy the benefits of this Monopoly.

I look forward to paying those fair roaming charges, and monopolistic carrier charges.

Those EU bastards are too controlling.

I use PAYG Three (Because it supports VoIP).

One Kid uses PAYG T-Mobile (EE), because you can pay £20 for 6 months of "Unlimited" Data..

He burns through about 5 gig a month on average - But VoIP is blocked.

Other kid is on contract, but the first month had overages that cost me about £100 extra... Enough to cover what I pay every TWO years for me and my first.

When these markets shrink then carriers will put prices up, It will be a race to the top.

The reason I got the contract was because many new phones are tied to contracts... The closing of Phones4U had a big impact on this. People might not spot how these carriers will up the prices, but they will up the prices.

[Charlie Clark]

Remit

Allowing Hutchison to take over O2 at the terms they proposed would have been bad for UK consumers and bad for the UK mobile sector.

So fucking what? This is for the UK regulator (OfCOM (joke that it is)) and the Monopolies and Mergers Commission(or whatever it's called) to decide. I'm a fervent European but I don't see, at least from this summary, why the Commission thinks it can rule on this unless it decides that either Three or O2 are getting unfair market share across Europe, in which case conditions could be applied.

The Commission can also get involved if it looks like regulation isn't working. This the logic behind the repeated calls to break OpenReach out of BT because the market for cables in the ground clearly isn't working in the UK. The same goes for electricity distribution in countries like France and Spain.

[Martin Summers]

And when the heck did we elect Margrethe Vestiges to decide what was good for UK consumers hey? Oh that's right we didn't. Gotta love Europe.

[Greg D]

Signs of corruption in the telecoms industry/EU

So, they allow Orange and T-Mobile to merge to make EE, and allow BT to buy EE. In order to compete, Three and O2 begin process for merging, get vetoed by EU/Ofcom. Is it a coincidence that the person heading up Ofcom used to work for BT?

I think not.

Regardless of whom you contract with (personally, I'm with Three and love their network), this can only be a good thing (the merger) and will allow them to compete with BT/EE/Orange/T-Mobile.

This STINKS of bias/corruption.

[Red Bren]

If OFCOM thinks the UK needs four or five mobile operators, why doesn't it make returning one of the licences a condition of the merger? It can then auction the licence to a new entrant. Surely Sky, Virgin or Tesco would be interested?

[Roland6]

Whilst the media are talking about Virgin/Liberty Global, we could see a consortium bid involving Sky/Virgin/Tesco (who supported the Three-O2 deal and would probably enter an infrastructure sharing agreement with Three...). Then we go out to those wishing to enter the UK market, such as China Mobile...

TalkTalk are in a difficult position, they may be considering putting in a bid, just to try and avoid a takeover bid from Vodafone, something that was alluded to a while back when discussing the then proposed BT/EE deal.

In all cases time and money will be spent on acquisition, delaying network investments etc. so consumers will be paying more, just so that Ofcom et al can spin their 'competition' mantra.