If the Vodafone-Three transaction is approved, the new entity will reach 99% of the U.K. population with 5G Standalone (SA) networks
The U.K. Competition and Markets Authority (CMA) said it is providing an early opportunity for interested third parties to comment on the potential impacts that the proposed merger between local carriers Vodafone and Three could have on competition in the domestic telecom market.
Vodafone UK is owned by Vodafone Group, while Three is controlled by CK Hutchison Group Telecom Holdings. Other major mobile operators in the country are BT’s EE and Virgin Media O2.
The entity said that announcement represents a preliminary action ahead of launching a formal investigation on the proposed merger.
Sarah Cardell, chief executive of the CMA, said: “We will be carefully considering how this deal may affect competition in the U.K., which could affect the options and prices available to customers. We will also assess how it may affect incentives to invest in the quality of UK mobile networks.”
“This is an opportunity for those with an interest in this merger to let us know their views before we launch a full investigation,” she added.
While it is customary for the CMA to investigate and decide whether a merger can proceed, it will consult telecom regulator Ofcom about the process.
“This invitation to comment is being launched before the CMA starts its Phase 1 merger investigation. The CMA needs to gather certain information from Vodafone and Three before it can start a formal Phase 1 investigation, including information about their U.K. activities, data and internal documents,” the CMA said in a statement.
“This period of information gathering is known as pre-notification and can take a number of months. Once underway, a Phase 1 merger investigation must be completed within 40 working days. If the CMA finds the merger could lead to a substantial lessening of competition, then it can refer it for a more in-depth Phase 2 merger investigation, which could last 24 weeks and are led by an independent panel of experts,” the entity added.
Vodafone Group and CK Hutchison Group Telecom Holdings have entered into binding agreements in relation to a combination of their telecommunication businesses in the U.K. Under the terms of the deal, Vodafone will own 51% of the new entity while Hutchison Group will own 49%.
If the transaction is approved, the new entity will reach 99% of the U.K. population with 5G Standalone (SA) networks.
Vodafone CEO Ahmed Essam previously noted that Vodafone and Three could potentially reduce investments in the 5G field if local regulators block the proposed merger between the two telcos.
Essam indirectly warned regulators that a decision to block the attempted merger of Vodafone and Three UK would result in them cutting their investment in digital infrastructure and being unable to deliver on the U.K. Government’s goals in the 5G field.
Essam said that, without the merger, “we won’t be able to invest as much, and we won’t be able to deliver the 5G ambition that’s coming in the wireless infrastructure strategy from the government. It will just slow us down.” The U.K. Government’s new Wireless Infrastructure Strategy has laid out a goal for all populated areas in the U.K. to be covered by 5G Standalone networks by 2030.
