Ofcom warns T-Mobile merger could trigger competition review

The proposed merger of mobile operators Orange and T-Mobile could trigger an in-depth review of Britain’s mobile markets, media watchdog Ofcom has warned.

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In a report on the state of the mobile market, Ofcom says it is satisfied that consumers are well served thanks to competition between the country’s five mobile carriers, but this situation could change if the merger went ahead.

“The proposed merger between T-Mobile and Orange may well have significant implications for the conclusions set out in this document and for our future work programme,” it says.

Deutsche Telekom and France Telecom formalised the merger of T-Mobile UK and Orange in November, two months after the deal’s announcement.

The combined operation will take a 37% market share, ahead of current market leader O2, which has a 27% share, and Vodafone with 25%. Revenue for the combined company is expected to be €9.4bn (£8.42bn) annually. It is currently subject to regulation by the Office of Fair Trading and the European Commission’s competition panel.

The Commission says it had not yet received any such submission from Orange and T-Mobile, who signed an agreement last month to form a 50/50 joint venture that would grab the top spot in Britain with a market share of 37%.

“Our current view, that a market review is not needed, might change if one or more competitors left the market, particularly at the network level,” Ofcom warns.

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