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U.K. digital economy minister says Ofcom could still protect consumers in a three-player mobile market.
U.K. digital economy minister Ed Vaizey on Wednesday said the mobile market could still consolidate, despite 3UK’s unsuccessful attempt to merge with O2.
"It doesn’t necessarily close the door to a three-player market in the fullness of time," Vaizey said on day one of Total Telecom’s Connected Britain event in London.
The minister talked up the progress that has been made in extending the reach of next-generation networks, and how the government’s digital economy bill is intended to improve connectivity further by implementing the 10 Mbps universal service obligation (USO) and overhauling the electronic communications code to make it easier for telcos to deploy infrastructure.
"Ultrafast should be the norm in the 2020s," he said.
However, telcos have long argued that they need scale in order to make the kind of infrastructure investments needed to achieve these objectives, which was one of the arguments put forward by 3UK parent CK Hutchison in favour of its £10.25 billion acquisition of Telefonica’s O2 UK unit.
However, the deal was blocked by the European Commission in May on concerns that it would have reduced choice and driven up prices for consumers.
U.K. regulator Ofcom was also staunchly opposed to the tie-up.
"If 3/O2 went ahead there might have been spectrum left over for a new fourth player," Vaizey said, while acknowledging that it is right for regulators to safeguard end users.
However, "the regulator here could intervene to protect consumers even if it went down to a three-player market," he insisted, doing quite a good job of containing his frustration.
"I haven’t seen the detriment to the consumer," that some predicted would happen with consolidation in other markets, he added, referring to Austria as an example, where Hutchison won European Commission support for its takeover of Orange’s local unit at the start of 2013.
Vaizey also took the opportunity to reiterate his support for the U.K.’s continued membership of the European Union.
He said the consensus among economists and analysts is that a Brexit "would have a significant economic impact," and the fact that no-one can say definitively what will happen does not make the prospect of leaving the EU any more palatable.
When it comes to investment decisions, companies want certainty, Vaizey said, warning that in the event of a Brexit, "uncertainty would go through the roof."
