Connected Research

Union policy research in the 21st century

OFT seeks competence over T-Orange JV

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In a simple statement put out on its website today, the UK’s Office of Fair Trading has requested that the European Commission refers the ‘UK aspects’ of T-Orange – the proposed joint venture between the UK interests of Orange and T-Mobile – to the OFT itself. The request comes in pursuance of the Commission’s invitation to ‘interested third parties’ to submit their observations on the proposal.

This is a very interesting reference in such a short statement, since the JV concerns only the UK aspects of these companies’ international operations – and, therefore, the OFT is seeking competence to examine the joint venture in its entirety. It may be, of course, that the OFT is being deliberately careful to exclude itself from claiming competence over any forthcoming wider merger between Orange and T-Mobile – to which the UK joint venture might be seen as a prelude.

The OFT statement goes on to say that the OFT’s initial view of the merger, following consultation, was that it threatened:

Significantly to affect competition in mobile telecommunications in the UK.

The Connect Sector of Prospect responded to the consultation, expressing the ‘strong view’ that it was appropriate for the relevant UK authorities to request that the venture be referred in whole or in part to them, and documenting our concerns, also raised in this blog in the period since the announcement of the JV, over its potential impact on spectrum, on the level of competition within the mobile sector and on employment.

Consequently, this is a welcome response and we will be closely monitoring further developments.

[Edit 4 February: representatives from Deutsche Telekom and Orange are reported to have defended the deal [registration required; limited viewing time] as positive for the UK market and as not being in need of any further reference to the Competition Commission, although nothing has officially been released by either. The Guardian has commented that, chief in the OFT’s reasoning is likely to be the impact of the merger on 3 UK and the dominance of the JV of UK spectrum – the latter, in particular, proving to be a thorny issue. It is also quite possible, as The Guardian argues, that the threat of a reference to the Competition Commission would secure voluntary concessions from the JV partners, not least on spectrum, so this is an issue on which developments might move quickly given the desire of the two to achieve a rapid conclusion to their proposal.]


Written by Calvin

03/02/2010 at 1:45 pm

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