O2 mobile phone network
Three's proposed takeover of O2 has been blocked by the European Commission. Reuters

The European Commission, the executive arm of the European Union, has revealed it will block Hutchison's proposed £10.25bn (€12.71bn, $14.48bn) acquisition of the O2 mobile network in Britain to preserve 'affordable prices'.

Margrethe Vestager, the competition commissioner, took to Twitter on 11 May to announce the decision to prevent the deal from going ahead "to serve UK consumers". Speaking at a press conference, she added the proposed deal would have detrimental effects on innovation in the sector.

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"We had strong concerns that consumers would have had less choice finding a mobile package that suits their needs and paid more than without the deal," Vestager added.

The decision marks the second time in less than a year that Brussels regulators have blocked a proposed merger between two telecoms heavyweights in a bid to preserve competition.

In September 2015, Sweden's Teliasonera and Norway-based Telenor shelved plans to merge their Danish mobile subsidiaries after EU regulators insisted they wanted four network operators in the market.

In March 2015, Hutchison, the owner of Three, agreed to acquire O2 from Spanish group Telefonica, leading to an in-depth investigation by Brussels authorities, which has issued a statement of objection stretching to hundreds of pages.

Both, the EC and the Competition Market Authorities, said they were concerned about the outcome the deal would have on the UK mobile phone market, which would effectively be left with three mobile operators – Vodafone, EE and Three-O2.

However, in her press conference on Wednesday, Vestager indicated Hutchinson's concessions did not go far enough in addressing the commission's competitions concerns.

The deal between Telefonica and Hutchinson, which is controlled by Hong Kong billionaire Li Ka-shing, would have created the biggest mobile network in Britain.