A £15 billion merger of two of the UK’s mobile phone network operators, Vodafone and Three, came a major step closer today when the Competition and Markets Authority (CMA) said a package of investment and consumer protection could overcome its concerns about the deal.
The CMA said that the “remedies” it identified today could allow the merger of the UK businesses to go ahead in what would mark a profound reshaping of the country’s mobile infrastructure ownership.
The watchdog had provisionally found in September that the proposed merger could lead to higher prices for customers and harm the position of “virtual” network operators, such as Sky Mobile, Lyca, Lebara and iD Mobile.
However, in a Remedies Working Paper published today the CMA said “a legally binding commitment to undertake the network integration and investment programme proposed by Vodafone and Three would significantly improve the quality of the merged company’s mobile network, boosting competition between operators in the long term and benefiting millions of people who rely on mobile services.”
The CMA also found that a commitment to retain certain existing mobile tariffs and data plans for at least 3 years” would provide protection to consumers and virtual operators.
Stuart McIntosh, chair of the CMA inquiry group leading the investigation, 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.
“A legally binding network commitment would boost competition in the longer term and the additional measures would protect consumers and wholesale customers while the network upgrades are being rolled out.”
In a joint statement Vodafone and Three said: ”An appropriate balance appears to have been struck by ensuring that the significant benefits of the merged company’s investments can be realised in full and at pace to the benefit of the country and its citizens, while addressing the CMA’s stated concerns. However, it is essential that balance is preserved through to the end of the process, reflecting that the parties have offered extensive remedies, including by making their future network roll-out fully enforceable. The merger will be a catalyst for positive change.”
