Vodafone and Three UK have voiced opposition to the provisional findings by the Competition and Markets Authority (CMA) regarding their proposed merger. They assert that the merger will boost competition, benefit consumers, and spearhead an £11 billion investment in the UK’s digital infrastructure.
In a joint statement, the companies argued, “The merger will encourage growth, enhance competition, and bring world-class 5G to every school and hospital, significantly improving the UK’s connectivity.”
Both companies are actively engaging with the CMA, optimistic about gaining approval. They have proposed several commitments to address the CMA’s concerns, particularly those related to retail and wholesale market segments. Retail customers on the SMARTY brand will see tariffs maintained at £10 or below for two years post-merger. Wholesale customers will benefit from a reference proposal, enabling Mobile Virtual Network Operators (MVNOs) to offer competitive deals leveraging expanded network capacity.
This proposed merger is viewed by the carriers as a transformative step for UK connectivity. It aims to modernize the digital infrastructure, thereby benefiting businesses, the public sector, and driving technological and economic progress. Vodafone and Three emphasize that the merger will lead to substantial improvements in customer experience and promote significant investment.
The CMA’s final decision on the merger is expected on December 7. Last month, an in-depth CMA investigation identified concerns that the merger could lead to higher prices for millions of mobile customers in the UK or reduced service quality, such as smaller data packages in contracts. The watchdog particularly worried about the impact on customers less able to afford mobile services, who might face higher bills or may have to pay for network improvements they do not value.
The CMA’s provisional findings also highlighted potential negative impacts on MVNOs. The reduction from four to three network operators could make it harder for MVNOs to secure competitive terms.
To address these concerns, the CMA outlined possible remedies, including binding investment commitments and measures to protect consumers in both retail and wholesale markets. The regulator could also prohibit the merger if it determines other remedies insufficient to address competition concerns.
Last year, Vodafone UK and Three UK, owned by CK Hutchison Holdings, announced a joint venture to bring their operations under a single provider. Under the proposed terms, Vodafone will own 51% of the new entity, while Hutchison Group will own 49%.
