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The proposed merger of Vodafone and Three in the UK has received provisional approval from the Competition and Markets Authority (CMA). The regulator stipulated that both mobile giants would need to commit to prices and speed, and promise to boost the country’s 5G rollout. The CMA previously said the proposed creation of the UK’s largest mobile network could lead to increased bills and undermine competition in the sector. However, it is now satisfied that these worries could be addressed if the companies agree to take these remedial steps.
Vodafone and Three announced their plans to merge their UK-based operations in June last year, which would create a combined network of approximately 27 million users. A Vodafone spokesperson stated that the company required more time to assess the CMA’s conditions, but stated that the Authority’s proposals showed a pathway to final clearance of the merger. As previously reported, both companies have maintained that the merger was in everyone’s best interest.
Stuart McIntosh, who co-ordinated the CMA panel investing the deal said he believed the merger had ‘the potential to be pro-competitive for the UK mobile sector if our concerns are addressed,’ adding that the CMA expected the merger to create a competitive environment, which would maintain current levels of competition in mobile. Mr. McIntosh also indicated that short and long-term commitments not to increase the cost of some current mobile tariffs and data plans and agreements with Mobile Virtual Network Operators such as Sky Mobile, Lyca, and Lebara would need to be upheld.
Industry analyst Paolo Pescatore described this latest move as ‘another key step towards approval’ and predicted that a merged entity of Vodafone and Three would be in a stronger position to compete with EE and O2, the current market leaders. The CMA has asked for responses by 12 November and will deliver a final decision on the merger by 7 December
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