Vodafone-Three merger looks more likely than ever after CMA announcement

The Vodafone-Three merger in the UK looks more likely than ever today after the Competition and Markets Authority (CMA) said the firms could address the competition concerns. It said that a multi-billion-pound upgrade of the merged company's network across the country (including the rollout of 5G), plus short-term consumer protections, could solve the concerns, allowing the merger to go ahead.

The CMA found in September that the merger could lead to higher prices for consumers and harm mobile virtual network operators like iD Mobile and Lebara. For this reason, the regulator wanted Vodafone and Three agree to some measures before allowing the deal to go through.

The CMA said:

The remedies proposed today would require Vodafone and Three to:

• deliver their joint network plan – which sets out the network upgrade and improvements they will make through significant levels of investment over the next 8 years across the UK. This would be a legal obligation overseen by both Ofcom – the telecoms regulator – and the CMA
• commit to retain certain existing mobile tariffs and data plans for at least 3 years, protecting millions of current and future Vodafone / Three customers (including customers on their sub-brands) from short-term price rises in the early years of the network plan
• commit to pre-agreed prices and contract terms to ensure that Mobile Virtual Network Operators can obtain competitive wholesale deals

Commenting on the latest developments, Stuart McIntosh, chair of the 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."

The CMA said its announcement is provisional and a final decision will be released before the December 7 statutory deadline.