O2 and Three mobile merger blocked by European Commission

[Spud1]

Good news, and a good decision by the commission.

The merger of Orange/T-Mobile was fine imo - at the time we had 5 operators (Orange, Voda, O2, Three, T-Mobile), and T-Mobile were a relatively minor player in the UK who had been losing market share for years. So dropping down to 4, all of similar clout (albeit with different market focuses) wasn't really an issue. It proved positive for consumers too, and EE has worked out really well as a network provider.

Merging O2 and Three would have been a step too far in my opinion. It would have taken us down to 3 operators which would really be pushing it. Very happy they have stopped this, and hopefully it will help to continue the price wars we've seen over recent years. My mobile bills have dropped hugely over the past 8 years and by keeping competition alive, hopefully they will continue to do so (at least in terms of value for money).

As to why the UK competition authorities didn't step in first, well thats a whole different question. I'm not really sure and tbh I don't really care

[peterb]

Not to mention it's perfectly all right to have openreach and bt as one company stifling any real competition in the landline/broadband market...

They are separate companies with their own structure, although ultimately owned by the BT group. This was set as a ruling by the regulator at the time.

The BT group is a public company, owned by the shareholders, and the shares are traded on the London stock exchange, enabling anybody to own a part of the company and share in its profits.

Many investors are institutions, investing money on behalf of its participants. Some of those are pension providers, so if you have any investment savings, or a private pension provision, you may be a shareholder in BT.

[LSG501]

They are separate companies with their own structure, although ultimately owned by the BT group. This was set as a ruling by the regulator at the time.

I'm not on about how it's owned we all know that it falls under one big umbrella brand but when the EU commission is using lack of competition as the primary reason for not allowing the merger of three and o2 then you do have to wonder why BT and Openreach haven't been made to be run as separate companies because it allows BT and unfair advantage over every other 'telephone/broadband' company out there.

The BT group is a public company, owned by the shareholders, and the shares are traded on the London stock exchange, enabling anybody to own a part of the company and share in its profits.

Many investors are institutions, investing money on behalf of its participants. Some of those are pension providers, so if you have any investment savings, or a private pension provision, you may be a shareholder in BT.

My issue isn't over their profits although I do begrudge the amount they get from what is essentially a monopoly where were forced to pay a 'telephone' line rental which seems to increase each quarter even if we only use the 'phone' line for broadband. This is also paid to them even if we go with a reseller because the BT group owns the last (1/4) mile of every line and because of this there is basically no difference in the line rentals and the only differentiation is down to the packages on offer putting the smaller often better value companies at a disadvantage because they don't have the guaranteed line rental income that BT has even if the line isn't with BT.

[Ncc-1709]

The Uk is one of the worse network suppliers in the EU... its also worst for Broadband speeds...
Bulgaria has better network coverage and better broadband speeds than the uk...

[Defiant]

Thank ****

[peterb]

I'm not on about how it's owned we all know that it falls under one big umbrella brand but when the EU commission is using lack of competition as the primary reason for not allowing the merger of three and o2 then you do have to wonder why BT and Openreach haven't been made to be run as separate companies because it allows BT and unfair advantage over every other 'telephone/broadband' company out there.

My issue isn't over their profits although I do begrudge the amount they get from what is essentially a monopoly where were forced to pay a 'telephone' line rental which seems to increase each quarter even if we only use the 'phone' line for broadband. This is also paid to them even if we go with a reseller because the BT group owns the last (1/4) mile of every line and because of this there is basically no difference in the line rentals and the only differentiation is down to the packages on offer putting the smaller often better value companies at a disadvantage because they don't have the guaranteed line rental income that BT has even if the line isn't with BT.

BT retail (who provides the service to the end user) pays exactly the same to Open reach as any third party reseller. That was one of the reasons Openreach was set up to own the infrastructure and sell wholesale services to any reseller - including BT retail.

The cost of maintaining the last mile is exactly the same whether it is used for speech or data - in fact because data transmission is more demanding, the line and equipment has to be maintained to a higher specification. The rental is for line rental, the calling plans and data plans are extra, although I agree that it should be possible to rent a data only plan. The counter argument is that the telephony is provided as an inclusive service.

Many of the smaller companies also use the BT fibre infrastructure, so they pay that element as well. They can install there own equipment at an exchange and provide there own infrastructure, but that also needs maintaining, so in many cases it will be more cost effective for the smaller companies to lease capacity from Openreach.

[1kca]

I thought this was a done deal? Not disappointed in the slightest though

[LSG501]

BT retail (who provides the service to the end user) pays exactly the same to Open reach as any third party reseller. That was one of the reasons Openreach was set up to own the infrastructure and sell wholesale services to any reseller - including BT retail.

It's not the same though as it's basically BT group paying BT group so it never actually loses any money where as the resellers pay BT group. It's like having 2 tills in one shop and transferring cash from one till to the other till while still taking money from customers.

[nacasatu]

The EU denied this in the UK yet let Three takeover O2 in Ireland AND allow some more dubious and dodgy mobile dealings go through in Ireland previously, some of which are still subject to government and criminal inquiries, where the main benefactor of one such deal sold up soon after for hefty profits and now controls most of the mobile networks in the Caribbean and Latin America.

I reckon this is more of an attempt by the EU to suggest they are there to protect average citizens and the UK should not go ahead with a Brexit, because you'll miss this kind of consumer protection.

Uh huh...

[peterb]

It's not the same though as it's basically BT group paying BT group so it never actually loses any money where as the resellers pay BT group. It's like having 2 tills in one shop and transferring cash from one till to the other till while still taking money from customers.

Not quite the same, because they are separate companies, that file separate accounts, and the cash is exchanged for al service. In this case Open reach provides a wholesale service to BT retail.

It's a bit like the director of a company who controls his own bank account and the company bank account. He can't transfer money from one to the other without accounting for it.

[jim]

It's not the same though as it's basically BT group paying BT group so it never actually loses any money where as the resellers pay BT group. It's like having 2 tills in one shop and transferring cash from one till to the other till while still taking money from customers.

It really isn't.

As far as Openreach is concerned, it doesn't matter whether they are paid by BT or an external party - they get the same outcome.

As far as BT Retail is concerned, they have to pay another party to provide the infrastructure - they're not getting it for free.

Yes, they are part of the same overall group, but that doesn't mean it's one single pot of money as you're implying. If OpenReach was carved out, everyone would still be in exactly the same situation that you describe.

Whilst there are issues around BT Retail and OpenReach being within the same company (the allocation of costs for the EE buyout to OpenReach is one that occurs to me), as far as I can tell what you're talking about definitely isn't one.