The CMA recently highlighted that it has concerns that the proposed Vodafone-Three merger could lead to mobile customers facing higher prices and reduced quality
The UK’s Competition and Markets Authority (CMA) has confirmed it will launch, as expected, a Phase 2 investigation into the proposed merger of local carriers Vodafone and Three.
The regulator has given itself a deadline of September 18 to complete this in-depth probe.
The CMA noted that this merger “may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.”
The CMA recently highlighted that it has concerns that the deal could lead to mobile customers facing higher prices and reduced quality. It also raised concerns the merger may make it difficult for smaller MVNOs including Sky Mobile, Lebara and Lyca Mobile to negotiate good agreements for their own customers.
The CMA launched the initial phase of an antitrust investigation in January after the entity was notified by the two carriers about the proposed merger. This initial review is designed to identify whether the deal may lead to a “substantial lessening of competition” and therefore requires an in-depth, phase 2 investigation. Phase 2 investigations allow an independent panel of experts to probe in more depth initial concerns identified at phase 1, the CMA had explained.
Last year, Vodafone UK, which is owned by Vodafone Group and Three UK, owned by CK Hutchison Holdings had announced a new joint venture agreement which would bring their operations under a single network provider. Under the terms of the proposed merger, 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 and Three UK recently said that the recent decision by the CMA to carry out a new in-depth review of their proposed merger was in line with the expected timeframe for completion of the transaction. In a joint statement, the two telcos also said they remain confident that the transaction will deliver significant benefits in terms of competition.
Vodafone CEO Ahmed Essam had 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.
The other two operators in the country are EE, owned by BT, and Virgin Media O2.
