Vodafone’s blockbuster merger with rival Three has been hit by another delay after the UK’s competition regulator decided to extend the deadline for its investigation into the deal.
The Competition and Markets Authority (CMA) probe is now set to conclude eight weeks later than originally scheduled, with a new deadline of 7 December.
In a statement the CMA said: “The Inquiry Group now considers that it will not be possible to complete the investigation and to publish its final report within the revised reference period. The Inquiry Group aims to complete the inquiry as soon as possible.”
The CMA set out four separate reasons for why it sought what in law is known as a “special reasons” deadline extension. Those include the major spectrum sharing tie-up unveiled between Vodafone and Virgin Media O2 last month, which it said “will require the Inquiry Group to assess the implications of the agreement, including gathering and analysing further evidence from third parties.”
The regulator also bemoaned a “failure” by Three owner CK Hutchison to comply with its request “to provide documents and information specified,” adding that Hutchison subsequently did comply.
In a statement, Vodafone said: “It is not unusual for the CMA to exercise its right to extend its reference period in cases such as this.
“We appreciate the additional time it is taking to assess the extensive evidence submitted, which sets out how this transaction will significantly benefit over 50 million mobile customers, enhance competition and help transform the UK’s digital infrastructure. We will continue to work closely with the Inquiry Group as it finalises its report”.
In June last year Vodafone and Three unveiled a deal to merge their UK businesses, creating a £15 billion behemoth that would become the country’s biggest mobile network operator with around 27 million customers. Vodafone and Three’s parent company CK Hutchison Group Telecom Holdings plan to create a new entity, in which Vodafone will hold a 51% stake and CK Hutchison 49%.
The proposal cleared its first regulatory hurdle in May, after the UK government elected not to stand in its way following a detailed national security review. But the deal could still be scuppered by competition regulators after a previous merger between Three and O2 was blocked by the European Commission in 2016.
Vodafone has promised to invest £11 billion into telecoms technology if the deal is given the green light, claiming the merger could be worth as much as £5 billion per year in “economic benefit” by 2030 as it will allow the UK’s 5G network to get up and running more quickly.
In April, the Competition and Markets Authority announced it would begin an in-depth probe of the tie-up after expressing concerns it could have a “substantial” impact on competition, “may make it difficult” for smaller mobile operators and could lead to higher prices for consumers.
