back to article Three to chop off £3bn of its network in bid to woo EU over O2 merger

Three UK is making a last-ditch attempt to win EU approval of its £10.25bn O2 merger with a number of sweeteners, including £3bn in network deals with competitors, according to reports. According to The Telegraph, Three's owner, CK Hutchison, has signed deals with Virgin and Sky that will guarantee space on its expanded mobile …

  1. phy445

    That pledge on prices...

    They may not be putting up prices after the merger, but they have just tried to increase my bill by just shy of 40% by dropping the deal I was on.

    Needless to say I went to the inter-webs, found a deal that gave more data for the old price, and dumped Three.

    1. dotdavid

      Re: That pledge on prices...

      "Hutchison responded that for five years it would not hike up bills for consumers"

      Also doesn't guarantee that they'll drop bills for customers if industry-wide costs decreased for whatever reason.

    2. Timmy B Silver badge

      Re: That pledge on prices...

      I totally agree. Three's One Plan was excellent and I swapped to a similar one a while ago. The seem to be gradually offering less and less for more and more money. As I can get a heavily discounted EE contract because I am a BT customer they are looking like a very appealing prospect when my contract runs out in a couple of months. Unless three can offer me a bargain like they did last time - though this is very unlikely as the manager of the local three shop told me they have very limited leeway on contracts.

      1. PNGuinn

        Re: That pledge on prices...

        "As I can get a heavily discounted EE contract because I am a BT customer"

        Hmmm ... Unfair competition? Distorting the market by a dominant Telco? Perhaps OFCON / the EU should look at this rather than bite the smallest / weakest operators, resulting in them being later swallowed by one or more of the big players ...

        Nudge, nudge, wink, wink ...

      2. NeilPost

        Re: That pledge on prices...

        Three will only offer a deal on the top packages, and it was a piss poor £3 loyalty discount.

    3. davemcwish

      Re: That pledge on prices...

      Yup there will always be other deals, it's just a question of timing. I've got my eye on EE's limited time 16GB Data Unlimited Minutes Unlimited Voice for £20 pcm

      1. Mark 78

        Re: That pledge on prices...

        You can get that deal for about £12 if you go through some websites (using money back stuff)

      2. Anonymous Coward
        Anonymous Coward

        Re: That pledge on prices...

        Yup there will always be other deals, it's just a question of timing.

        What leads you to this conclusion? The big four/three have vast market share, and several of the largest MVNOs (Talkmobile, Life. Giffgaff, are wholly owned subsidaries of the big players (a blatant attempt to keep market share by making the MVNO market harder to get into?).

        If there's just three big players plus their captive MVNOs, then any new entrant will be crushed instantly unless they're so niche that they don't present a threat. Do you not find it strange that in the energy market, where the bunglers of the Competition & Markets Authority maintain there is insufficient competition there are six large companies, two medium to large companies (over 1m customers) and about thirty five other active non-captive suppliers?

        Yet in mobile telecoms you think we'll see real competition between three companies? We've already seen the MNO's trying to squeeze out third party retailers. The demise of Phones4U may not be mourned, but the MNOs hate the resellers for creating competition and pushing discounts - what will happen if they have even more control?

      3. Anonymous Coward
        Anonymous Coward

        Re: That pledge on prices...

        You just missed out on Vodafone's 20Gb deal, for similar monthly subs. I guess it will return.

        BT Mobile's one is slightly better, esp. if you are a BT broadband customer, but no tethering lets it down ... for no reason I can fathom, as tethering seems to be defacto standard now, rather than the Three exception when I went One Plan about 4 years back.

    4. gbyers

      Re: That pledge on prices...

      Yep, unlimited data on pay as you go recently went from £15 to £20 and just last week they announced they were raising it again to £25!

    5. Anonymous Coward
      Anonymous Coward

      Re: That pledge on prices...

      What he said.

      I was paying £15/month for the unlimited data One Plan which they have dropped. They recommended "the best for me" was their new unlimited plan at £30/month.

      1. Sir Sham Cad

        Re: That pledge on prices...

        Same here. "We're axing your old tariff (200 mins, AYCE data and unlimited texts) Looking at your usage we think our 200 mins, AYCE data and texts plan is the best fit for you."

        So exactly the same plan just 7 quid a month more.

        I assume, then, that they're getting their 5 years worth of price hikes in before this deal goes through.

        Shit Bastards!

    6. Tessier-Ashpool

      Re: That pledge on prices...

      I really hate mobile phone operators. They are such sharks.

      Three haven't actually moved me off my old One Plan all-you-can-eat data, rolling monthly contract... yet. But, bizarrely, after I've logged into their website, there doesn't seem to be any way of finding out what the *exact* terms and conditions of my contract actually are. I never received any correspondence from them indicating that there's now a tethering limit associated with my contract. I'm learning that from El Reg. Even the option on their website to 'Change Plan' is blocked because I happen to be on a legacy plan.

      It's all a big squirming can full of worms.

    7. paulf Silver badge

      Re: That pledge on prices...

      This is the problem with all these commitments and undertakings they're offering - they're absolutely meaningless. There are plenty of ways to increase prices without increasing the nominal monthly charge:

      reducing bundle allowances, cancelling plans with only more expensive alternatives, increasing out of bundle prices, increasing roaming charges, removing special offers (e.g. feel at home roaming), increasing handset prices/decreasing handset subsidy, increasing any connection charge, increasing international call charges, imposing/increasing minimum charge on out of bundle calls, ending the contracts of customers they feel are insufficiently profitable so they have to get a more expensive contract elsewhere. I bet Marketing and Legal are more creative than I am.

      If they've offered undertaking X, they've already figured out how to get around it to their own benefit.

      Also how much weight will Sky (20%, £2bn not £20bn I'm guessing) and Vermin Media (10%) have, even if they vote together, against the majority shareholder CKH? Even if Sky and VM vote together against CKH they would only be successful in votes requiring more than 70% of votes (they're stuffed in votes requiring 2/3 or a simple majority) and I bet CKH is busy changing Three UK's articles of association to ensure it's 70% retains 100% control in any significant decisions.

  2. sleepy

    Carriers bad, regulator good

    It's the mandated competition between carriers that let Apple keep control of the customer relationship with iPhone, by doing a deal with an exclusive carrier. That carrier might win with Apple, but couldn't lose. Once the door was opened by Apple, all the android phone's slipped in behind, and the power of the carriers to tax services was gone. Hurrah for regulators and clever Apple.

    Last year Three's "All you can eat data" became "All you can eat data, so long as it's not tethering", which caused a massive price hike for me. And I hate the way they use meaningless phrases like "all you can eat". In fact I hate all the carriers generally. You can open an account online, or in store, but you can't close it online or in store; you have to do it over the phone. "that's all done for you then", but then it turns out it hasn't been done at all, and you end up paying for another six months before finally getting the account closed.

    But I love my original Virgin £0 a month contract, which is still running. Just pay for outgoing calls. Except there aren't any. T mobile signed a silly MVNO contract with Virgin to split call charges but pay Virgin marketing support monthly per subscriber, and it keeps on giving. Of course Virgin stuffed themselves full of little old ladies at £0 a month who never make a call. And me.

    There's another round of carrier-squeezing waiting to happen when we start buying service through Apple or Google, and are dynamically switched among available carriers based on instantaneous price and availability. Since the marginal cost of bandwidth is near zero, there could be some drama. Only a monopoly supplier would be able to charge enough to cover capital investment.

  3. wonkotsane

    Double standards

    Can someone explain how Three merging with O2 is bad for consumers but BT buying EE isn't? The combined BT-EE operation still has a near monopoly on fixed line infrastructure, is a dominant player in streaming TV services and now it owns by far the largest mobile network. BT was gifted a fixed line telephone network by the taxpayer and EE was gifted a big chunk of 4G spectrum early which it used to become the dominant 4G provider. OFCOM has not just protected but enhanced the position of dominant providers.

    1. johndooley

      Re: Double standards

      Maybe they don't want a foreign firm owning the national comms network - Just In Case - you know ;)

      Out of interest my comment could be wrong - who owns BT? Is it British?

      Probably not.

      1. NeilPost

        Re: Double standards

        BT is owned by it's shareholders, 2 significant ones now are France Telecom and Deutsche Telecom (previous owners of EE). They mostly got new BT shares in the transacytion to absord EE.

    2. paulf Silver badge

      Re: Double standards

      In short (not agreeing/disagreeing - just as I see it):

      BT + EE didn't reduce the number of mobile or fixed operators to any tangible extent (BT had minimal mobile presence, EE relatively insignificant in landlines) although there were concerns about BT having a dominant position in the provision of fixed links to MNO cell sites to EE's benefit EE under BT's ownership.

      Three + O2: Tangibly reduces competition in the MNO market because it reduces the number of distinct MNOs from four to three. That doesn't take into account the network sharing deals MBNL and Cornerstone which have differing relationships with their constituent MNOs (Cornerstone is more site/Air Con/Power sharing; MBNL shares almost everything except spectrum).

      BT could use its fixed line dominance to advance EE's market share/revenues &c but there remains three mobile operators (O2, Three, Vodafone) to compete with EE, the latter of which has substantial fixed/landline assets.

    3. NeilPost

      Re: Double standards

      Pretty simple, prior to the merger

      EE does little/no relative fixed line. BT do little/no mobile. The marget segments do not overlap, so it's a simple approval of the merger.

      O2 are a large mobile player, 3 are a large mobile player. A merged O2/3 will have a dominant market share, so will either be blocked, or will be subject to OFCOM undertaking, like Openreach (a BT company) are.

      ... It's pretty simple. It's not BT that have a monolpoly on fixed line operations, it's Openreach (as a BT subsiduary that does), and this is pretty strictly governed by Openreach being firewalled operationally within the wider BT organisation and Undertakings agreements (with Ofcom) that the other telco's are not subject to - Virgin have no obligation to allow competitors access to it's (cable) mobopoly infrastructure for example. BT do.

  4. NeilPost

    As someone who got fucked over with their Price Hike and left all I can say is Three, go fuck yourself.


  5. hoola

    Sky & Virgin

    I would be far more concerned with the sub-plot here. Letting Sky in particular get the filthy hands on yet more areas of the communications infrastructure can only be bad. Virgin and Sky will not be doing this as benign bystanders. This will give they huge stakes in the infrastructure. This deal should be under the same if not more scrutiny.

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