Doubts have been cast on plans to merge the UK mobile operations of Orange and T-Mobile following the decision by the UK's Office of Fair Trading (OFT) to ask the European Commission to refer the decision back to the UK. The owners of the two operators, France Telecom and Deutsche Telekom, had hoped to bypass the UK regulator by lobbying for the merger to be reviewed only by the European Commission in the hope of a quicker and easier approval.
However, the OFT has decided to intervene as it now takes the view that the joint venture significantly threatens competition in the UK mobile market. If the request is granted the OFT says that it intends to examine the proposed joint venture with a view to deciding whether it should be referred to the Competition Commission for an in-depth investigation. The planned merger, which would reduce the number of UK mobile operators from five to four, has already been criticised by UK consumer groups.
Mobile operators Telefonica O2 and 3 have also expressed concerns as the merged grouping would hold most of the UK's 1800MHz spectrum. If the European authorities do agree to the OFT request and the matter is referred to the Competition Commission, the merger will be subjected to a lengthy and rigorous investigation which could delay its completion for some considerable time.
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