A pedestrian walks past a Vodafone store in central London on May 16, 2023. Margherita Della Valle slammed recent results.
Adrian Dennis | AFP | Getty Images
Britain’s competition regulator on Thursday approved the merger of British telecoms firms Vodafone and Three, subject to certain conditions.
Britain’s Competition and Markets Authority (CMA) said the £15 billion ($19 billion) project should be allowed to go ahead if the two companies signed “binding commitments to invest billions of dollars” to roll out a joint 5G network across the UK. cooperate
The merged entity will also be required to cap certain mobile tariffs and “provide default contract terms” to so-called mobile virtual network operators (MVNOs) – mobile operators that use another company’s network.
Vodafone and Three UK Networks owner CK Hutchison announced the deal last year. The deal, now approved, will combine the two brands’ UK operations, with Vodafone taking a 51% controlling stake and CK Hutchison taking a minority stake.
Kester Mann, consumer and connectivity director at CCS Insight, said in a report: “This mega-merger marks one of the most significant moments in UK mobile history and heralds the arrival of a new market leader with 29 million customers.
“After months of rigorous regulatory scrutiny, the results for Vodafone and Three have been as good as they could be. Not only have they received approval, but the agreed remedies and commitments are less onerous than feared.”
The decision comes after the CMA launched an antitrust investigation into the deal in January and announced an in-depth investigation in April. Last month, the competition regulator set out a path for the deal to go forward, subject to certain remedial measures.
Regulators are concerned that the merger will reduce the number of major telecom network players from four to three and lead to higher prices or reduced services.
Vodafone said the deal is expected to be officially completed in the first half of 2025.
Margherita Della Valle, chief executive of Vodafone, said in a press release: “Today’s decision creates a new force in the UK telecoms market and frees up the energy to build the network the country deserves. Investment required in infrastructure.
CMA requires commitment
The legally binding commitments require Vodafone and Three to create their own 5G networks over the next eight years.
Vodafone has previously said the combined entity would invest 11 billion pounds in UK telecoms infrastructure.
The new company will also be required to limit certain mobile tariffs and data plans for three years and provide preset wholesale service prices and contract terms for virtual network operators.
These conditions will be monitored by the CMA and communications regulator Ofcom.
“After careful consideration of the evidence and the extensive feedback we received, we believe the merger is likely to promote competition in the UK mobile industry and should be allowed to go ahead – but only if Vodafone and Three agree to implement our proposed measures” , Stuart McIntosh, chairman of the independent panel leading the CMA investigation, said in a press release.
PP Foresight founder Paolo Pescatore said it would take some time to see the benefits of the deal.
“The decision may have been made today, but it is still a waiting game. The bottom line is that it will take many years to realize the full merits of the deal, and there will be many difficult decisions,” Pescatore said explain.
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