There are plenty of reasons for viewing todays huge merger deal between the UK mobile networks of Vodafone and Three with suspicion. It could reduce choice for consumers. It may lead to job losses. And it is possible that they will downgrade their service even more than they already have, cut back on investment, and squeeze more money out of a captive market. <\/p>\n
Yet that is not quite the whole story. In fact, done right, the merger could even turn out to be a rare Brexit win. <\/p>\n
Todays tie-up between Vodafone and Three was widely expected. The two companies will combine their British networks, and will have 27 million users between them, taking them ahead of Virgin Media O2, with 24 million and BT Group with 20 million. It will become the leading provider in the industry. Of course it remains to be seen whether our new, slightly batty regulator, the Competition and Markets Authority, allows it to go ahead. One point is certain, however. The EU would have blocked it. It has form, particularly in the UK, when it blocked the 2016 attempt to merge Three and O2. <\/p>\n
The mobile telecoms industry is murderously competitive, with wafer thin margins, in which no one makes any real money <\/p>\n
In fairness, it is easy to see what the EU was getting at. Mergers are usually bad for customers: indeed the whole purpose of them is typically to insulate companies from anything as bothersome as people being able to go elsewhere. And yet, mobile competition has not worked out very well. In reality, the mobile telecoms industry is murderously competitive, with wafer thin margins, in which no one makes any real money. By preventing it from consolidating, even modestly, all the EU has done is weaken it. The result? All the money is made by Apple and Google, both American companies, and none by anyone else. <\/p>\n
With three major networks, British consumers will still have plenty of choice. And the mobile companies might actually be able to make some money, which they can then re-invest in new services and products. The mini-computer we all carry around in our pockets remains the most lucrative piece of technology in the world, and one that still has plenty of potential for growth. <\/p>\n
There is lots of faddish talk of industrial strategies, and of more investment in green energy, batteries and electric vehicles. And yet, the UK is never going to be able to match the subsidies on offer in the US, and there is no point in even trying. In truth, allowing a slightly stronger trio of profitable, growing mobile operators to emerge is a far better bet and it has been made much easier by being outside the EU. <\/p>\n
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The Vodafone-Three merger could be a Brexit win - The Spectator<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" There are plenty of reasons for viewing todays huge merger deal between the UK mobile networks of Vodafone and Three with suspicion. It could reduce choice for consumers. It may lead to job losses Continue reading