UK operator 3 renewed a plea for consolidation as regulator Ofcom opened a consultation on how it will approach the mobile market in future, including strategies for potential industry mergers.
In its initial response to Ofcom’s proposals, 3 UK argued investment is spread too thinly across too many players and the country does not have the quality of mobile infrastructure it deserves.
Robert Finnegan, the operator’s CEO, argued mobile networks in the country are “sub-par by international standards” and insisted “consolidation in the industry could change that”.
“Moving from four to three mobile players in the UK would mean better, smarter investment in the networks which would, in turn, improve the quality and scale of connectivity in Britain and would unleash more competition,” Finnegan said.
Finnegan previously described the UK as “dysfunctional” due to concerns over operator’s ability to invest in networks.
A bid by 3 parent CK Hutchison to acquire O2 UK was blocked in 2016, but following the latter’s subsequent merger with Virgin Media speculation abounds regarding other potential tie-ups, including recent reports linking Vodafone UK with a move for 3.
In its discussion paper, Ofcom explained it is not proposing new regulatory interventions in mobile markets at this stage, but is “ready to engage and take action where necessary”.
“We are clarifying our position on mobile consolidation,” the regulator added, noting its stance would be informed “by the specific circumstances” of any proposed merger, “taking into account how markets are evolving”.
Finnegan said 3 “welcomes Ofcom’s clarification that it has no fixed position on mobile consolidation, and its recognition that what matters is the effectiveness of competition rather than just the number of competitors”.
Ofcom invited responses to the consultation by 8 April and plans to set out its conclusions by the end of the year.