O2 Three

European regulators have blocked the proposed £10.3 billion takeover of O2 by the parent company of rival mobile network Three.

The European Commission competition commissioner, Margrethe Vestager said there were strong concerns over the impact CK Hutchinson's takeover would have on competition and pricing in the UK.

The merger would have left Britain with just three major mobile network providers, and with less competition there is less motivation for companies to charge lower prices.

Three's parent company is understood to have accepted the decision and will not be launching a challenge.

Ms Vestager said: "The goal of EU merger control is to ensure that tie-ups do not weaken competition at the expense of consumers and businesses.

"We want the mobile telecoms sector to be competitive, so that consumers can enjoy innovative mobile services at fair prices and high network quality."

CK Hutchinson had pledged to freeze prices for five years and investment billions of pounds in infrastructure in an attempt to allay fears over competition. But the Commission said its promises "were not sufficient to prevent" development of network infrastructure and innovation from stalling.