Competition watchdog escalates probe into Vodafone-Three tie-up
The competition watchdog's formal phase two review will investigate whether the deal could harm competition in the UK's telecoms sector.
Britain’s competition watchdog has today referred the proposed tie up of Vodafone and Three UK for an in-depth investigation, as expected, and has appointed an inquiry panel to conduct the process.
The Competition and Market Authority’s formal phase two review will investigate whether the deal could harm competition within the UK’s telecoms sector, potentially leaving customers worse off too.
The inquiry group, announced on Thursday, is chaired by former Ofcom director Stuart McIntosh. Three other members include ex-lawyer Stephen Rose, consumer policy consultant Ashleye Gunn and previous director of the CMA’s Takeover Panel, Crispin Wright.
They have a statutory deadline of 18 September 2024 for this investigation, by which they will need to publish their findings and any next steps.
Last month, the regulator’s phase one investigation found the combination of the second and fourth largest mobile operators in the UK, “could lead to mobile customers facing higher prices and reduced quality.”
But Vodafone and Three argue this merger will enable the combined business to invest £11bn and create a best-in-class 5G network for the UK. Currently, the UK ranks just 22nd out of 25 European countries for 5G, according to Opensignal research as of February this year.
The mega-merger, first announced in June last year, would create the UK’s largest mobile phone network.
In a joint statement, Vodafone and Three UK were expecting this next step and said it is in line with their original goal to wrap up the deal by the end of 2024.
The companies said: “Vodafone UK and Three UK remain confident that the transaction will drive stronger competition in the mobile sector and give customers and businesses a step-change in network quality, speed, and coverage from day one.
“A combined network would also boost competition in the wholesale market, by offering greater choice to MVNOs [mobile virtual network operators], the fastest growing segment of the UK’s mobile industry. Both companies have already stated there will be no change to each operator’s pricing strategy as a result of the merger.
“We will review the potential concerns raised by the CMA and look forward to continuing to engage constructively with them throughout the review.”
