Vodafone and Three UK initially announced their intention to merger operations last year
The U.K. Competition and Markets Authority (CMA) has officially extended the deadline for its investigation into the proposed merger of Vodafone and Three UK to December 7.
In April, the regulator had set a deadline of September 18. A month later this deadline was moved to October 12. The regulator noted that the initial extension had been chiefly due to a delay on the fact it had not received some required documents or information from Three UK.
Announcing the latest modification, the CMA explained the inquiry group looking into the proposed merger “considers that it will not be possible to complete the investigation and to publish its final report within the revised reference period [ending 12 October].”
The regulator noted the “very wide scope of this inquiry and the technical and regulatory complexity of the sector.” It also highlighted the need for an “econometric estimation of consumer demand for mobile services, which is based on granular and voluminous third-party data”.
The CMA also cited the need to assess the implications of an extended network sharing agreement between U.K. carriers Virgin Media O2 and Vodafone, which had been announced last month. The telcos said that many elements of the new agreement expand on the existing arrangement between Vodafone UK and Virgin Media O2 and are independent of the outcome of the proposed merger between Vodafone UK and Three UK.
In May, Last month, the U.K government released a “publication of notice of Final Order” that provisionally approves the merger, subject to certain conditions.
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, which started in April and are expected to conclude in September, allow an independent panel of experts to probe in more depth initial concerns identified at phase 1, the CMA explained.
Vodafone and Three UK had previously said that the 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 said they remain confident that the transaction will deliver significant benefits in terms of competition.
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 that 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%.
“The merger will create a third mobile network operator with scale, able and incentivized to invest fully in a best-in-class network. A combined network would also boost competition in the wholesale market, by offering greater choice to MVNOs, the fastest growing segment of the U.K.’s mobile industry,” they added.
The CMA recently highlighted that it has concerns that the deal could lead to mobile customers facing higher prices and reduced quality.
