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A mega-merger of Three and Vodafone will create the largest phone network in the United Kingdom, despite concerns that customer bills would increase due to the significant change to the market.
Following the British regulator’s approval, the £16.5 billion ($20.9b) agreement will impact 27 million users.
Speaking on BBC Radio Four this morning, Vodafone boss Margherita Della Valle insisted the deal was “self-funded” with no need to pass on costs to customers and no public funding involved.
The Competitions and Markets Authority (CMA) is the regulator responsible for approving the merger deal. The approval is based on billions to be invested in the country’s 5G network and specific caps to be introduced on tariffs available to customers.
These terms form part of a legally binding agreement that both companies must adhere to and meet, moving forward under one umbrella.
CMA representative Stuart McIntosh, who was at the forefront of the probe into the merger, said the venture “was like to increase competition” in the mobile market in his rationale for the regulator’s approval.
“For retail customers, we would require the Parties to cap the prices for selected plans, protecting current and future customers, including customers on their sub-brands, from short-term price rises during the early implementation of the network plans,” he added.
In recent weeks, the CMA was also urged to use newly invested powers to probe the Apple and Google duopoly in the mobile browser market.
We’ve cleared #Vodafone’s merger with #Three, subject to the companies agreeing to legally binding commitments, including to invest billions in rolling out a combined #5G network across the UK.
This would ensure the merger boosts competition in UK mobile #telecoms. pic.twitter.com/g1tF6kEwA0
— Competition & Markets Authority (@CMAgovUK) December 5, 2024
Consumer body urges CMA to “rigorously monitor” Three-Vodafone deal commitments
The landmark agreement has largely been in place for over a year, waiting on regulator approval, and will reduce the number of UK mobile networks from four to three, alongside EE and O2.
At this time, no information has been disclosed on the branding to be used for the unified company moving forward, but the terms of the deal will see Vodafone own 51% of the equity and after three years (subject to conditions) it could acquire the remaining 49% stake held by Three’s parent company CK Hutchison.
The merger is expected to be completed during the first half of 2025.
Despite approval, some are still wary of what is to follow as voiced by Which?, the British consumer champion.
The body’s director of policy and research claimed the CMA has taken a gamble on the terms agreed to make the deal happen.
“For this merger to work for consumers, the CMA and Ofcom must rigorously monitor whether the merged company sticks to its commitments and be prepared to act decisively if it does not,” said Rocio Concha.
Image credit: Via Midjourney
