CMA approves Vodafone/Three merger

The Competition and Markets Authority (CMA) has approved the proposed merger between Vodafone and Three, after the regulator launched a phase two investigation in September.

The regulator said it would allow the deal if both companies sign binding commitments to invest £11bn in the roll out of a UK-wide combined 5G network.

It added that the network commitment would be "supported by shorter term customer protections", which would require the merger to cap certain mobile tariffs and offer present contractual terms to mobile virtual networks operators for a period of three years.

Previously, the CMA had stated the merger "could lead to higher prices for customers" and less advantageous terms for virtual networks providers, which depends on networks like the ones provided by Vodafone and Three to supply their own retail customers.

In its final decision, the regulator confirmed it is now satisfied that the proposed commitment resolves its competition concerns.

Chair of the independent inquiry group leading the investigation, Stuart McIntosh, said: "It’s crucial this merger doesn’t harm competition, which is why we’ve spent time considering how it could impact the telecoms market.

"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.

"Both Ofcom and the CMA would oversee the implementation of these legally binding commitments, which would help enhance the UK’s 5G capability whilst preserving effective competition in the sector."

In response to the decision, Vodafone said that the merger is a "once-in-a-generation opportunity to transform the UK’s digital infrastructure", with the telecoms firm’s chief executive officer, Margherita Della Valle, adding that the combination is "great for customers, great for competition and great for the country".

Vodafone has stated that the new network will reach 99% of the population and will benefit over 50 million customers.

Della Valle concluded: "Today's decision creates a new force in the UK's telecoms market and unlocks the investment needed to build the network infrastructure the country deserves. 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.

"Today's approval releases the handbrake on the UK's telecoms industry, and the increased investment will power the UK to the forefront of European telecommunications."



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