TalkTalk claims BT-EE deal could see price increases of 25 per cent or more

TalkTalk slams CMA decision, stating that it was 'dangerous' that the deal had been looked at in isolation

The Competition and Markets Authority's (CMA) decision to approve BT's £12.5bn takeover of EE could see price increases of 25 per cent or more, according to BT rival TalkTalk.

Last week, the CMA approved the merger unconditionally, without offering any remedies. The UK's trade association for VoIP and new communication services, ITSPA, labelled the deal as one that could be "extremely damaging". It cited the wider consolidation taking place in the UK's telecoms market, with Hutchison Whampoa, owner of Three, proposing to buy O2 from Telefonica, the UK could be left with only three main mobile operators.

TalkTalk has echoed many of the concerns that ITSPA referred to, stating that it was disappointed although not surprised about the CMA's decision "even though the new entity will be even more dominant than it was before privatisation 30 years ago".

"It is dangerous that the regulator has looked at this merger in isolation, given the unprecedented levels of consolidation taking place in the wider telecoms industry. The UK has long been one of the most competitive markets in Europe, but if the Three/O2 merger also goes through, this would end," TalkTalk said.

"If the experience of other European markets such as Ireland and Austria is any guide, moving from four to three mobile providers will lead to price increases of 25 per cent or more," it added.

TalkTalk said it hoped that Ofcom will take the CMA's decision into account in its review of the future structure of Openreach - it has been suggested that Ofcom will push BT to separate from Openreach in order to make the broadband space fairer and more competitive.

Ofcom CEO Sharon White had stated that competition, not consolidation, was a better way to drive investment and deliver lower prices to the consumer. TalkTalk is concerned that BT will now have a 45 per cent share of the UK's mobile spectrum, and 40 per cent of the consumer telecoms market, while the combined Three-O2 business would have 40 per cent of the mobile market.

"Three's entry into the market 16 years ago was designed to spur competition and drive down prices - a role it fulfilled magnificently. Now it will become the incumbent, with a greater incentive to protect market share instead of driving market disruption," claimed TalkTalk.

TalkTalk concluded its statement by suggesting that the CMA's decision would be the first step towards "a slower, stagnant digital future".