Hutchison Whampoa, the owner of operator Three, has agreed terms to buy Britain's second largest mobile operator O2 for £10.25bn, creating a giant that will have 40% of the market.
The deal follows BT's £12.5bn takeover of EE, and with both BT and Hutchison having now reached definitive agreements to acquire EE and O2 respectively the focus turns to getting the necessary regulatory approval, according to Matthew Howett, Practice Leader, Regulation at Ovum.
"The exact timing and next steps in each case remain somewhat unclear given the complexity of what lies ahead, but approval could take up to a year and will almost certainly be fraught," he said. "The UK's competition authority, the CMA, has already invited stakeholders to comment in relation to BT/EE.
"A full investigation will begin once formal notification takes place. In the case of Three/O2, European authorities will probably take the lead, but they will likely need to remain in close contact with the CMA over issues coming out of BT/EE.
"In both instances the battle lines have been drawn, and it's becoming clearer what concessions might be offered in an attempt to get things through, or what potential remedies might be imposed from above. These will almost certainly focus on mobile backhaul, spectrum holdings, and the current network sharing agreements between Vodafone and O2, and Three and EE."
A number of uncertainties remain, believes Howett. "First, how will the CMA consider Three/O2 as it works its way through BT/EE? EU competition authorities are unlikely to want to hand over control of the Three/O2 approval, but the CMA might try its luck and ask for jurisdiction," he added.
"Which leads to the second uncertainty - how EU competition authorities will view further consolidation (the now-familiar cases of Germany and Ireland were approved under the previous Commission) and what concessions they might accept.
"MVNO access has been a popular choice, but the UK already has a vibrant MVNO scene and so that is less relevant here. Instead, competition authorities will want to preserve the 'challenger' behavior in the market we've seen from Three. What could that look like? Will Vodafone's bullish statements about moving into broadband and TV be enough?"