Re: The FT this week called the O2/Three merger a solution looking for a problem"
It's just grumping without any serious analysis.
Relevant bit is -
"The European regulators appear strangely in thrall to the operators’ argument that they need to merge in order to invest in new networks and services. But there is no evidence that this is so. Although returns on capital employed have fallen in European mobile from a very high 20 per cent to 10 per cent over the past five years, this still well exceeds their cost of capital.
Nor have regulators found a satisfactory substitute for the competitive stimulus they are permitting operators to eliminate. Guaranteeing access to virtual mobile operators is little more than a sticking plaster with few adhesive qualities. These entities neither reliably lead the market on price, nor can they deliver improvements to the quality of networks.
Brussels’ past lack of rigour gives little comfort that it will reach a much firmer conclusion in the case of Hutchison’s British deal. Indeed the risk is that precedent will lead the European regulator to rubber-stamp the same flawed arrangements.
The mobile business remains a national market and those affected are UK consumers. Either Brussels must toughen its line, even at the cost of some inconsistency, or it should break the circuit of dismal precedent and hand the deal back to the UK authorities. One thing is certain. Having messed up three mobile markets, Brussels should not be permitted to make the same mistake again."