Vodafone and Three have made additional concessions to secure regulatory approval for their planned merger in the UK. The deal continues to face scrutiny from the Competition and Markets Authority (CMA). The telecom giants have introduced new commitments to address competition concerns.
Alongside these developments, Vodafone issued statements regarding its UK and Italian merger plans. The company confirmed that new regulations mean it no longer requires shareholder approval for either deal, removing a minor hurdle.
Read More: Vodafone-Three UK Merger Faces Regulatory Hurdles
The CMA is expected to deliver its verdict on the Vodafone/Three UK merger by early December. The regulator has expressed concerns that the merger could reduce competition in both retail and wholesale markets. While Vodafone and Three dispute these concerns, they have responded by offering further concessions.
In a joint statement, the companies reaffirmed their commitment to two essential remedies: an Ofcom-supervised GBP 11 billion investment in network infrastructure and a plan to sell spectrum to rival, Virgin Media O2. They have also promised to maintain low tariffs and increase wholesale access to their network.
Vodafone and Three pledge to keep tariffs at GBP 10 or below for two years following the merger for budget-conscious customers using the SMARTY brand and for social tariffs on the SMARTY and VOXI For Now brands. They also confirmed ongoing support for vulnerable customers.
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On the wholesale side, they plan to offer a reference deal to encourage mobile virtual network operators (MVNOs) to use their expanded network capacity.
These new commitments signal the companies’ determination to address regulatory concerns. Analysts have suggested that pricing could be a critical factor in whether the merger is approved.
Furthermore, Vodafone recently published a study suggesting that a nationwide 5G network could generate up to GBP 3 billion for the UK economy, framing the merger as key to funding such investments.
Paolo Pescatore, Founder of PP Foresight, commented on the companies’ reaffirmed commitments, noting that while Vodafone and Three oppose some of the CMA’s proposed remedies, they are willing to collaborate in key areas. These include long-term investment commitments, a two-year price freeze on specific tariffs, and efforts to enhance competition in the wholesale market.
However, Pescatore emphasized that pricing may remain a significant pain point. Whether these commitments are enough to satisfy the CMA’s concerns remains uncertain, as the final decision regarding the merger will be made on December 7, 2024. Until then, Vodafone and Three have vowed to continue engaging with the CMA to resolve any outstanding issues.
