The UK’s Competitions and Markets Authority (CMA) has given the green light to the Vodafone-Three merger, but there are conditions in place. The merger is set to officially wrap up in the first half of 2025.
The CMA had concerns that this merger might push prices up and cut back on service quality. To address this, Vodafone and Three have to present a joint network plan that outlines how they’ll upgrade and combine their networks in the UK over the next eight years. They also need to cap certain mobile tariffs and data plans for three years, which should help shield a good number of customers from immediate price hikes as this new network plan rolls out. Plus, the merged company must offer clear pricing and contract terms for wholesale services, ensuring that virtual network providers can still get competitive deals.
This merger is seen as Vodafone’s answer to BT’s acquisition of EE in 2016 and the 2021 merger of Virgin Media and O2 into VMO2. Margherita Della Valle, Vodafone Group’s CEO, called it beneficial for customers, competition, and the UK as a whole. Together, Vodafone and Three plan to invest £11 billion to build what they describe as one of Europe’s top 5G networks, aiming to cover 99% of the population and serve over 50 million customers. They promise better service, reliability, and capacity to handle the growing demand in mobile data, especially with the rise of technologies like artificial intelligence.
Alex Haffner, a competition partner at Fladgate, noted the CMA’s decision wasn’t surprising, as it had signaled openness to approving the merger with appropriate concessions. He highlighted that the CMA allowed a ‘4-3’ merger in the mobile sector based on behavioral remedies, which is a shift from past approvals that required structural changes. This indicates a pragmatic approach, suggesting that having three strong mobile operators might benefit consumers more than the alternatives.
Kester Mann from CCS Insight considered this deal a significant milestone in UK mobile history, marking the emergence of a new leader with 29 million customers. He views the CMA’s approval as a positive step, balancing the need for competition with the push for investment, ultimately leading to better mobile services in the UK.
On the flip side, Matthew Howett from Assembly Research pointed out that Sky might still challenge this decision, though any successful appeal would be tough and costly. He expects the merger will have overall positive effects on investment and network quality, benefiting consumers and businesses that rely on these services.
Howett also mentioned the vital role of Ofcom, the telecom regulator, in overseeing the Vodafone-Three merger. He believes that Ofcom needs to monitor the situation closely to ensure the new entity meets expectations and to prevent any potential market distortions.