Scottish Daily Mail

Older mobile phone users face bills hike

- By Katherine Rushton Media and Technology Editor

ELDERLY mobile phone users face an increase in their monthly bills if two of the country’s biggest networks are allowed to merge, it was claimed last night.

The boss of the watchdog Ofcom said the £6.2billion deal between O2 and Three would ‘damage’ competitio­n between UK mobile operators, forcing prices upwards across the board.

Sharon White added that those who use their mobiles infrequent­ly – usually the elderly – and are therefore less attractive as customers are likely to be the worst hit.

Miss White, chief executive of the mobile and television watchdog, said: ‘I’m very concerned that we’re heading towards higher prices of mobile services for UK consumers if this deal goes through.

‘We’re particular­ly worried that this merger would damage competitio­n between the mobile companies, reduce customer choice and see mobile prices go up. We’re particular­ly concerned about those who use their mobile phones less, so older and more vulnerable people.’

Older people are likely to be among the worst affected by the price rises, because mobile operators reserve their best deals for the heavy users – usually younger customers – from whom they stand to make the most money. Meanwhile, the companies load a disproport­ionate share of the extra cost on to occasional users, who are less profitable to have on their books.

Telefonica, which owns O2, has agreed to sell it to Three’s Hong Kong-based owner, Hutchison Whampoa.

The deal is still under review by the European Commission. But if it gets the green light, it would create the UK’s largest mobile operator, with a 40 per cent share. Its only major rivals would be Vodafone and EE. Miss White said prices had risen sharply in other European countries with just three big mobile operators, and that Britain would be likely to follow suit.

In Austria, the cost of running a mobile has gone up by an average of 15 per cent following a 2012 merger between two of its four telecoms operators.

If this increase were mirrored in Britain, the average household’s mobile bills would rise from £532.44 in 2014 – the last year for which figures are available – to £612.34 within the next two years.

Miss White said: ‘Today, the UK has one of the most competitiv­e markets for mobiles, and consumers have benefited from lower prices. Our experience is that competitio­n, not consolidat­ion, drives investment and delivers low prices.’

Mobile operators argue that this sort of consolidat­ion will allow them to improve the quality of their mobile networks, and boost customer service.

But Ofcom claims that this rarely happens, and instead mobile operators use their new clout to extract more money from customers.

‘It would damage

competitio­n’

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