O2 and Three merger could result in higher bills for customers, Ofcom exec warns

Three is seeking to become the biggest mobile operator in the UK by acquiring rival O2

Ofcom chief Sharon White says the UK’s broadband provision market has to change (Ofcom)

The proposed merger between O2 and Three could push up mobile phone bills for users, according to Sharon White, head of communications watchdog Ofcom.

Three is seeking to become the biggest mobile operator in the UK by acquiring rival O2, reducing the number of big players in the market down from four to three.

White urged the European Commission to throw out the deal in a letter in the FT. Ofcom researched has shown that mobile bills are 10-20 per cent higher in countries that have three mobile operators instead of four.

Austria's prices have gone up by between 15-30 per cent for customers that call and make texts since a deal there.

"We are concerned that the smallest mobile network, Three proposes to become the biggest by acquiring its rival, O2. The combined group would control more than four in 10 mobile connections," White said.

UK mobile companies generated £15 billion of revenue in 2015, partly because of strong competition, White argued. "This is not a broken market," she said. "Competition, not consolidation, has driven investment."

European competition regulators opened a full inquiry into the deal in October. They have until March 16 to decide whether or not to block it.