The Competition and Markets Authority (CMA) has given its backing for the proposed telecoms merger between Vodafone and Three to go ahead.
Vodafone and Three’s deal would be a multi-billion-pound commitment to upgrade the merged company’s network across the UK, including the roll-out of 5G.
A CMA investigation led by an independent inquiry group had found in September that the merger could lead to higher prices for customers, and harm the position of other mobile network operators, such as Sky Mobile, Lyca, Lebara and iD Mobile.
The competition watchdog also consulted on potential solutions to address competition concerns around short-term customer protections.
Chair of the inquiry group leading the investigation, Stuart McIntosh, said: “We believe this deal has the potential to be pro-competitive for the UK mobile sector if our concerns are addressed.
“Our provisional view is that binding commitments combined with short-term protections for consumers and wholesale providers would address our concerns while preserving the benefits of this merger.”
The CMA has today set out a remedies working paper that outlines several requirements for Vodafone and Three to make in order for the merger to go ahead.
This includes a legal obligation overseen by both the telecoms regulator, Ofcom, and the CMA itself, to deliver a joint network plan setting out the network upgrades they will make through investment over the next eight years.
The pair must also commit to retaining certain existing mobile tariffs and data plans for at least three years to protect millions of current and future Vodafone and Three customers, as well as commit to pre-agreed prices and contract terms to ensure that mobile network operators can obtain competitive wholesale deals.
Both Vodafone and Three have welcomed the CMA’s verdict, with the pair believing it provides a “path to final clearance”.
A statement from the two parties acknowledged that an “appropriate balance” had been struck by ensuring that the significant benefits of the merged company’s investments can be realised “in full and at pace”.
The statement went on to say: “The merger will be a catalyst for positive change. It will bring significant benefits to businesses and consumers throughout the UK, and it will bring advanced 5G to every school and hospital across the country. The merger is also closely aligned with the Government’s mission to drive growth and encourage more private investment in the UK.”
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