The CMA is now inviting input by February 9, 2024 on how the Vodafone-Three merger could affect competition
The U.K.’s Competition and Markets Authority (CMA) said it has officially started the initial phase of an investigation looking into the proposed merger between local carriers Vodafone UK and Three UK, CMA said in a release.
The regulator said it has kicked off the process after it had received the required pre-notification evidence and information from both Vodafone U.K. and Three U.K., as well as early views from stakeholders.
Under the terms of the process, the CMA now has up to 40 working days to assess the deal as part of a Phase 1 investigation. This review is designed to identify whether the deal may lead to a “substantial lessening of competition” and – if so – whether a more in-depth Phase 2 investigation is required.
Sarah Cardell, chief executive of the CMA, said: “This deal would bring together two of the major players in the U.K. telecommunications market, which is critical to millions of everyday customers, businesses and the wider economy. The CMA will assess how this tie-up between rival networks could impact competition before deciding next steps.”
The CMA’s goal is to assess the potential impact of a merger on competition. The regulator cannot consider other potential effects that a merger might have, for example, on access to personal data. The regulator also explained that potential national security concerns are a matter for the U.K. government, which may choose to intervene under the National Security and Investment Act if it finds concerns.
The CMA is now inviting input by February 9, 2024 on how the Vodafone-Three merger could affect competition. This process follows the preliminary invitation to comment launched by the CMA in October 2023. Under the CMA’s rules a Phase 1 merger investigation must be completed within 40 working days. The deadline for this investigation is therefore March 22, 2024.
If the CMA finds the merger could lead to a substantial lessening of competition in the domestic telecom market, then it can refer it for a more in-depth Phase 2 merger investigation. Phase 2 investigations last between 24 and 32 weeks and are led by an independent panel of experts.
Last year, Vodafone Group and CK Hutchison Group Telecom Holdings had entered into binding agreements in relation to a combination of Vodafone U.K. and Three 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.
The four mobile network operators in the U.K. are Vodafone, Three, BT/EE and Virgin Media O2.
