T-Mobile and Orange resist UK competition inquiry

The parent companies of T-Mobile and Orange are asking for the European Commission to examine their proposed merger deal as they believe UK authorities would take too long.

The Financial Times has reported that both Deutsche Telekom and France Telecom would run the risk of losing customers to its rivals if an inquiry into competition runs on for too long.

Competition lawyers also told the paper that the companies could expect a more relaxed attitude towards the merger in Brussels than competition bodies based in London.

The inquiry will start off in Brussels anyway as two thirds of the companies' revenue is produced outside of the UK, but consumer groups such as Which? are calling for UK authorities to take control of the merger.

John Holmes, a spokesperson from Which?, told IT PRO: "The principal reason is because this is a joint venture between UK subsidiaries only so only UK consumers will be affected. The only reason to have it looked at by Brussels is a technicality [down to parent company revenue]."

He added: "However the European Commission does have the power to refer it back to the UK and the Office of Fair Trading can request it."

Other regulatory bodies this side of the Channel are raising concerns over the deal before an inquiry has even begun.

Telecoms regulator Ofcom said in its Mobile Evolution report yesterday that it encouraged competition in the mobile market to fix its problems but the merger which would give the two companies a dominating market share of 36 per cent would damage that contest.

A statement from Ofcom said: "The proposed merger between T-Mobile and Orange may well have significant implications for the conclusions set out in this document and for our future work programme."

We contacted Deutsche Telkom but the company declined to comment. France Telecom had not responded to our request for comment at the time of publication.