The UK’s competition regulator, the CMA, has expressed concerns over the proposed merger between Vodafone and Three.
- The merger, if approved, would create a £15bn telecom giant potentially impacting mobile service prices and quality.
- The CMA’s provisional findings suggest the merger could lead to higher bills and reduced services for consumers.
- Vodafone and Three argue the merger will resolve market issues and improve network quality.
- A final decision on the merger is expected in December 2024.
The Competition and Markets Authority (CMA) has indicated potential negative consequences of the Vodafone-Three merger. The CMA’s provisional findings suggest the merger could lead to increased prices for mobile customers or reduced service offerings, such as smaller data packages.
Concerns have been raised regarding the impact of higher bills and reduced services predominantly affecting those least able to afford mobile expenses. Stuart McIntosh, leading the inquiry, has noted the balance of potential network investments against consumer costs.
Vodafone and Three have contested the CMA’s findings, asserting that the merger would enhance network quality and rectify existing market dysfunctions. Both companies are committed to working with the CMA to address these concerns while ensuring future network investments.
Vodafone shares remained stable following the announcement. The merger aims to form a dominant telecom entity with Vodafone holding 51% and CK Hutchison 49%, alongside a planned £11bn investment in a new 5G network.
Despite regulatory hurdles reminiscent of a blocked merger between Three and O2, Vodafone and Three’s leadership remains optimistic. Vodafone CEO Margherita Della Valle highlighted the merger’s alignment with EU competitiveness recommendations, stressing the urgency in improving network infrastructure to keep pace with technological advancements.
The CMA’s decision in December will ultimately determine the fate of the Vodafone-Three merger amidst significant regulatory scrutiny.
