(Reuters) - UK market regulator Competition and Markets Authority raised concerns on Tuesday about the lack of competition on one train route, between London and Exeter, which is part of the new South Western franchise awarded to FirstGroup and Hong Kong's MTR.
The CMA said there could be fare hikes, or worsening of services due to a lack of competition on the route as FirstGroup already operates the Great Western Railway franchise, which runs the only other train service between London and Exeter.
"The CMA believes that without its intervention, FirstGroup may be able to increase fares for passengers between London and Exeter, as it will be the only rail operator running all services on this route," the regulator said in a statement.
FirstGroup and MTR will have to submit proposals to address these concerns to the regulator, whose approval would enable the companies to avoid an in-depth phase-2 investigation.
Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Sunil Nair