Mergers between Telecoms and Software Groups Set to 'Overpower' Regulatory Frameworks, Warns Industry Regulator

The regulator of the UK's telecoms sector, Don Cruickshank, has warned that mergers between telecoms companies and software groups, such as British Telecom and Microsoft, are almost inevitable in the next few years. Speaking at a major public consultation meeting in London, Cruickshank stated that the converging worlds of telecommunications, information technology, and broadcasting will soon challenge regulation, highlighting the inadequacies of current rules in addressing market power and protecting access for competitors.

Key Takeaways:

• The industry regulator, Don Cruickshank, believes that mergers between telecoms companies and software groups are almost inevitable in the next few years.
• Regulators in Britain and Europe will struggle to keep up with the pace of change, as the convergence of telecommunications, information technology, and broadcasting challenges current regulatory frameworks.
• The outgoing Oftel chief, Don Cruickshank, has urged his successor to prioritize the issue of mergers and acquisitions in the sector, highlighting the need for a more proactive approach to addressing market power and protecting competitors.
• The mobile phone market is characterized by a "cartel" of Vodafone and Cellnet, and prices remain too high, with the regulator warning that there is a need to investigate this issue further.
• Oftel is set to release a consultation document on the mobile phone market within the next month, which will explore ways to promote greater competition and reduce prices.

Statistics:

• Oftel is due to release a consultation document on the mobile phone market within the next month.
• The regulator estimates that a competitive market in mobile has not developed despite five years of efforts at Oftel.
• The mobile phone market is dominated by a "cartel" of Vodafone and Cellnet, accounting for the majority of the market share and contributing to high prices for consumers.

Sources:

• "CEO sees mergers between telecoms and software groups as 'inevitable'." The Independent. [Source: The Independent]
• "Industry watchdog warns of mergers between telecoms companies and software groups." Financial Times. [Source: Financial Times]