$19 billion Vodafone and Three merger approved by UK competition watchdog

UK CMA gives the go-ahead for Vodafone and Three’s £15 billion merger deal
The companies must invest in the UK network and cap their prices
Together with VMO2, they expect to support 50 million customers

After a year-long investigation, Britain’s Competition and Markets Authority (CMA) has given approval to the Vodafone-Three merger, a deal worth £15 billion ($19 billion).

By consolidating their UK operations, Vodafone and Three will become a market leader with 29 million customers, making the merged giant even bigger than EE, which claims to have 25 million customers.

As part of the process, the CMA stipulated that the two companies must “sign binding commitments to invest billions to roll out a combined 5G network across the UK.”

Vodafone-Three merger given the go-ahead

Under the agreement, Vodafone will have a 51% stake, with Three owner CK Hutchison taking the remaining 49%.

Previously concerned about the potential for higher prices due to decreased competition and less advantageous terms for virtual network providers, the CMA concluded: “The group has confirmed it is now satisfied that the proposed network commitment, supported by shorter term protections for both retail and wholesale customers, resolve its competition concerns.”

The CMA says that by upgrading their networks over the course of the next eight years, Vodafone and Three’s work would actually boost competition. As a component of the terms set out by the CMA, Vodafone and Three must also cap their mobile tariffs and data plans for three years to protect customers against sharp price rises in the early years of the merger.

Stuart McIntosh, chair of the independent inquiry group leading the investigation, commented: “Having carefully considered the evidence, as well as the extensive feedback we have received, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.”

Vodafone CEO Margherita Della Valle said: “Consumers and businesses will enjoy wider coverage, faster speeds and better-quality connections across the UK, as we build the biggest and best network in our home market.”

Given that Virgin Media O2 agreed earlier this summer to a long-term network-sharing agreement with Vodafone and Three, subject to the now-approved merger, an anticipated 50 million UK customers will see the benefits.

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