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March 20, 2015

Will telecoms consolidation raise prices?

British consumers are getting worried.

By Alexander Sword

British consumers overwhelmingly expect to lose out from the upcoming mergers and acquisitions in the telecoms sector, according to a recent poll by uSwitch.

The research saw 73.7 percent of respondents claiming they expected to lose out from the consolidation, particularly through higher tariffs and monthly charges.

The findings come with a BT takeover of EE confirmed and Hutchinson Whampoa in exclusive talks concerning a take-over of O2.

Consumers’ obvious fear is that the mergers will decrease the amount of competition in the market and the incentive to compete to win customers.

However, analysts suggest that these fears are unwarranted due to the active role of UK telecoms regulators.

"This is a highly regulated market in general, and regulators would have a serious problem with major price rises," says Charlotte Patrick, Research Director at Gartner. "Mobile prices haven’t been highly regulated but we may see an increase in regulation.

"[Telecoms] regulators in the UK have been on the side of the consumer for a long time."

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The poll surveyed 620 users of the uSwitch Tech site.

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