LONDON : It has taken months of tortuous negotiations for Vodafone and CK Hutchison to agree a deal to create Britain's biggest mobile operator, but from a regulatory standpoint the hard work is only just beginning.
Hutchison tried to buy Telefonica's O2 network seven years ago, but the deal - already opposed by Britain's telecoms regulator Ofcom - was blocked by the European Commission on the grounds that it would damage competition. Legal wrangling about that decision continues.Analyst Paolo Pescatore at PP Foresight said the tie-up will be a hard sale given that both Vodafone and Hutchison's Three UK have been outperforming the market for the last year or so.
Customers will be no worse in terms of bills and will be better in terms of network performance, they said. "If you want to get 5G then you have to make investment, and at the moment the mobile network operators can't make the margins in order to be able to afford that investment because they don't have the scale," he said.The government said in April it wanted to create a pro-investment framework to deliver standalone 5G. There was no"magic number" of mobile operators, it said, although it added that all decisions on consolidation were for the CMA.
One of Britain's biggest unions, Unite, has already warned that a company so close to China should not have a leading role in telecoms infrastructure. But competition in Britain has been boosted by the mobile virtual network operator and wholesale market, which enables operators like Tesco Mobile and Sky to piggy back on existing networks, Gray said.
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