Vodafone and Three Defend Merger Against Competition Watchdog’s Claims
Vodafone and Three have strongly rejected the claims made by the UK’s competition watchdog, the Competition and Markets Authority (CMA), that their proposed merger would result in higher prices for millions of mobile users. The CMA has “provisionally concluded” that the merger would weaken competition between mobile networks, with particular concerns for customers who are least able to afford mobile services.
The ongoing probe into the merger, launched by the CMA in January, has raised worries over the impact on competition in the mobile market. The regulator will now consult on its findings and potential solutions, which could include legally binding investment commitments and measures to protect both retail and wholesale customers.
Vodafone’s UK boss, Ahmed Essam, defended the merger on BBC Radio 4, stating that the combined network would benefit customers and enhance competition in the market. He highlighted the firm’s commitment to an £11bn investment and willingness to make legally binding commitments to deploy this investment.
Despite Vodafone and Three’s assertions, the CMA remains unconvinced that the merger would be beneficial for consumers. Kester Mann from analysis firm CCS Insight noted that while the regulator is not shutting the door on the deal, it has concerns about the claims of superior network quality post-integration being “overstated.”
Consumer group Which? also expressed reservations about the merger, warning of a potential negative impact on millions of consumers. Director of policy and advocacy, Rocio Concha, emphasized the high bar set by the regulator for the deal to proceed and the challenging task of finding remedies for its concerns.
The proposed merger between Vodafone and Three, announced in June last year, aims to create the largest mobile network in the UK with around 27 million customers. However, the CMA’s provisional conclusion that the deal would lead to a “substantial lessening in competition” raises significant hurdles for its approval.
In addition to fears over price and service levels, the CMA is worried about the potential impact on smaller players in the market who rent space from larger operators. Vodafone and Three have argued that the merger would lead to increased investment in the UK and improve the quality of mobile networks, including the acceleration of 5G services.
The CMA is set to issue a final report on the merger in December, with Vodafone and Three expressing their commitment to working with the regulator to secure approval for the tie-up. The outcome of this high-stakes battle between the merging parties and the competition watchdog will have far-reaching implications for the mobile industry and consumers in the UK.
