The UK's Competition and Markets Authority has said that it's concerned by Vodafone's merger with Three, expressing that it could lead to millions of customers paying more for mobile services. The CMA conceded that the deal could improve the quality of mobile networks but warned incentives to follow through on investments after the merger is completed are "uncertain".
The findings by the CMA are provisional, the organization said. It will explore potential solutions with stakeholders over the next few months before releasing a final decision by December 7. If the deal were to go through in its current form, the CMA warns we could see:
- Price increases for tens of millions of mobile customers
- Customers getting reduced services such as smaller data packages in their contracts
- Higher bills or reduced services would negatively affect those most unable to afford mobile services
- MVNOs such as Lyca Mobile, Sky Mobile, and Lebara could be negatively impacted as they rely on Vodafone and Three networks
- Reduced number of network operators from 4 to 3, which could make MVNOs less competitive as they may have to pay more to use the networks
The CMA did find, however, that the merger could lead to an improvement in the quality of mobile networks and accelerate 5G deployment. It warned, though, that Vodafone and Three have overstated these claims as they may not have any incentive to follow through on the proposed investment after the merger.
For now, the CMA is provisionally saying that the deal would harm retail and wholesale mobile markets in the UK. Over the coming months, it will discuss remedies with stakeholders to try to get past this impasse such as including legally binding investment commitments which would be overseen by the sector regulator.
The CMA will now take responses to its provisional findings until October 4 and to its notice of possible remedies until September 27. These responses will be evaluated and will contribute to its final decision report which is due on December 7.
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