Three’s planned acquisition of O2 recently hit a small snag, as Ofcom CEO Sharon White publically expressed her concerns that the merger could lead to higher prices for customers.
But it seems that won’t be the case at all, as in response to the claim, Canning Fok, chairman of Three UK, has promised that Three and O2 will not “raise the price for consumers of a voice minute, a text or a megabyte in the 5 years following the merger. Every cost efficiency that combining the businesses achieves will be shared with our customers. Like for like, customers' bills will go down.”
But that’s not all. He also pledged that the combined company will invest £5 billion in their UK businesses over the next 5 years. Which, he claims, “is at least 20% more than would have been invested by the two companies on their own. More importantly, it is much more efficient spending, so quality of service in terms of capacity, coverage, reliability and data speeds will improve much more than if the two companies had not been combined.”
A final pledge he makes is that the combined might of the two companies will allow them to stand up to “the new Leviathan BT” and “the old top-of-the-heap predator Vodafone” and “deliver real competition, not just slogans.”
Those sound like big promises, but Fok seems confident of them, concluding that: “In short, over the next 5 years Three+O2’s customers will be getting more and paying less than they do today for mobile services and the wholesale market will also be better off. Let me emphasize: This is not an aspiration. It is a guarantee.”
This of course assumes the deal goes through and that is now in the hands of the European Commission authorities, but he’s certainly put forward a good argument as to why it should. Hopefully in the coming weeks we’ll have a better idea of the networks’ chances, so stay tuned for updates.
