OFT Unhappy About Proposed Orange and T-Mobile Merger

The Office of Fair Trading has expressed concerns that the proposed merger between mobile broadband providers T-Mobile and Orange could pose a significant threat to competition in the mobile broadband market. Rival operators Three (3), O2 and Vodaphone have called for an investigation into the merger.

The OFT?s official statement reads:

?The OFT’s initial view, following consultation, is that the joint venture threatens significantly to affect competition in mobile?telecommunications in the UK.?

They are now looking into the proposal further to decide whether it should be referred to the Competition Commission for a more detailed investigation.

If the merger goes ahead the group would effectively control 40% of the mobile broadband market and use 84% of the 1800 MHz radio spectrum, a very high proportion to be put in the hands of just one operator. 1800 MHz is currently being used for 2G voice calls however under the new Digital Britain plans it could become available for mobile broadband use.

It is suspected the OFT?s investigation will be used to negotiate concessions with the ?T-Orange? group to provide some Digital Britain friendly policies and help the government towards some of their goals. It could be used as a tool in helping the proposed 2mbps speed become available to everyone by 2012 however even if the merger goes ahead that goal is looking more and more unstable especially considering the prospect of a new government taking over the plans after the next general election.

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