CMA Concludes Initial Probe into Vodafone-Three Merger

CMA Vodafone Three

Vodafone UK and Three UK agreed on a merger last year, with Vodafone UK acquiring a 52% stake in the new business, while Three UK held the remaining minority share. Recently, the UK Competition and Markets Authority (CMA) completed the initial phase of its investigation into the merger, assessing whether the deal could significantly diminish competition.

The review, which began in January, concluded that the “CMA is concerned that combining these two businesses will reduce rivalry between mobile operators to win new customers.” 

The CMA has concluded that it has identified significant concerns that require further scrutiny in a Phase 2 investigation, in which an independent body will conduct a more in-depth review of the concerns raised in Phase 1. 

The high level of CMA intervention is required because, if approved, the merger will reduce the number of MNOs in the UK from four to three, with the newly merged company holding a 32.1% market share. Furthermore, the CMA concluded that “Vodafone UK and Three UK provide important alternatives for mobile customers.” 

The CMA is particularly concerned about the potential impact on smaller mobile virtual network operators (MVNOs), including Sky Mobile, Lebara, and Lyca Mobile. These operators rely on access to larger network infrastructures to serve their customers. The merger may, therefore, limit their ability to negotiate favorable terms as there will be fewer network operators available to host their services. 

Both Three UK and Vodafone UK have made significant investments in their networks in recent years, including the rollout of 5G. Both companies have stated that the merger will allow them to invest GBP 11 billion into services and next-generation wireless infrastructure.  

According to the CMA, Vodafone UK and Three UK have five working days to provide meaningful solutions to the CMA, or the transaction will be referred to a more in-depth Phase 2 investigation. 

Telecom Review Europe Newsletter

Subscribe to our newsletter!

Subscribe to our weekly newsletter and stay updated.

Telecom Review Europe