HONG KONG (Reuters) - CK Hutchison Holdings (HK:0001) will freeze mobile call and text messaging rates in the UK, the Hong Kong telecoms operator said on Thursday, as it seeks to force rivals to lower prices further in the highly competitive UK market.
The move is part of a plan to invest 5 billion pounds ($7.3 billion) in its businesses in Britain in the next five years following a potential merger of its local mobile business Three, with Telefonica 's (MC:TEF) O2 UK.
The British telecoms market's relatively low costs and margins have prompted a wave of consolidation as operators seek to meet the booming demand for superfast mobile and fixed line broadband services.
Last October, EU antitrust regulators launched a full investigation into Hutchison's 10.3-billion-pound ($15.8 billion) bid for British mobile operator O2, concerned that the deal may push up prices.
"From the outset, we have followed the principle that as technology improves people should always get more and pay less for their mobile services. That has not always made us popular with our competitors," Group Managing Director Canning Fok said in a statement, responding to telecoms competition in the UK.
"In short, over the next five years Three+O2's customers will be getting more and paying less than they do today for mobile services and the wholesale market will also be better off.
French telecoms billionaire Xavier Niel's Iliad (PA:ILD) could seek to enter the British market if the planned acquisition of O2 UK by Three creates an opening, according to sources.
But Iliad's interest in Britain would depend on the outcome of the European Commission's investigation into the O2-Three deal and whether the two operators will need to sell assets in order to get it approved.
Shares of CK Hutchison rose 2.7 pct by lunch break, outpacing a 1.5 percent gain in the benchmark index (HSI).
($1 = 0.6861 pounds)