O2

How we helped

• Public Policy & Regulation
• Economics Consulting

Mobile operators in the UK had developed a new form of retail offering in which customers entered into two separate linked contracts, one in which they purchase an airtime tariff and another in which they finance the cost of a mobile handset through a consumer credit agreement.

Ofcom, the UK communications regulator, was concerned that the form of the offering deterred customers from switching, preventing them from obtaining the best airtime deal, and proposed to restrict the linked contracts that mobile operators could offer. 

Acting on behalf of O2, we showed that Ofcom’s concerns were not plausible because its theory of harm did not consider appropriately how operators compete or how consumers behave. We also explained how Ofcom’s proposed form of intervention would lead to harm to consumers. In its final decision, Ofcom changed the proposed regulation, removing the specific restrictions that it had proposed.