Mobile phone price freeze pledge from Three owner amid O2 merger bid
Millions of mobile phone customers in Britain could see their bills frozen as part of efforts by Hutchison to gain approval for its proposed £10 billion merger of Three and O2.
Hutchison managing director Canning Fok has written an open letter outlining plans to freeze prices for customers on O2 and Three for five years, invest £5 billion to improve mobile phone coverage, reliability and data speeds and open its network to rivals to quell concerns about the proposed merger.
He wrote: "In short, over the next five years Three and O2's customers will be getting more and paying less than they do today for mobile services and the wholesale market will also be better off.
"Let me emphasise: This is not an aspiration. It is a guarantee. Over the coming weeks the promises I have laid out will be an important part of the case Three will put to Europe's competition authorities, who have had the wisdom not to rush to judgment until, as the law requires, they have heard our response to their concerns."
%VIRTUAL-ArticleSidebar-bills-guide%Earlier this week Ofcom's chief executive Sharon White said the merger could result in higher mobile phone bills for customers.
Ms White said the deal could threaten competition and revealed the telecoms regulator had made the case to the European Commission (EC), which is reviewing the proposal.
Hutchison, the owner of Three, agreed in March last year to purchase O2 from Telefonica for around £10 billion.
But in October, the UK-based Competition and Markets Authority (CMA) asked the EC to refer the acquisition for investigation.
Ms White, writing in the Financial Times, said the merger would mean the new company would control two in every five mobile connections and reduce the number of networks to three, the others being EE and Vodafone.
She added the regulator's main concerns were threefold - higher prices for consumers and businesses, disruption to the existing UK network arrangement and a "shift in the balance of power" between operators and independent retailers.
Ms White said an Ofcom analysis of prices in 25 countries showed average charges in markets with four competitors were around 10% to 20% lower than in those with just three.
Any merger would also "threaten" the arrangement which had seen the four companies combine their cables and masts into two networks, she said.
Last week, Three angered some of its customers by doubling the price of their monthly bills.
The operator - which has 8.8 million customers - said the decision was unrelated to its proposal to create the UK's biggest network, with 40% of users.
