Tim Hardwick
The UK Competition and Markets Authority (CMA) has approved the merger between Vodafone and Three UK, paving the way for the creation of the UK's largest mobile operator. The approval comes with legally binding commitments requiring both companies to invest billions of dollars in rolling out their combined 5G network across the country.
The CMA's decision appears to be something of a turnaround from its initial concerns in September, when it warned the merger could lead to higher prices for customers. The regulator now says it is satisfied the proposed network pledge will address competition concerns while protecting consumers.
Under the terms of the approval, the combined entity must meet several key commitments over the next eight years. These include implementing a comprehensive network modernisation plan and complying with price controls for the first three years. The agreement also requires the company to offer pre-set contractual terms to mobile virtual network operators that rely on its infrastructure.
The combined entity will serve around 27 million mobile subscriptions, surpassing current market leaders Virgin Media O2 and EE. Vodafone will initially own 51 per cent of the venture, with plans to acquire the remaining 49 per cent after three years.
In a press release, Stuart Mackintosh, chairman of the CMA’s independent investigation panel, said: “Having carefully considered the evidence, as well as the extensive feedback we have received, we believe that the merger is likely to increase competition in the UK mobile sector and should be allowed to proceed.”
The merger will be jointly overseen by the CMA and Ofcom, the UK’s communications regulator. The combined company will be required to publish annual reports detailing its progress on its network, with the CMA specifically monitoring consumer tariffs and wholesale terms.
The £16.5 billion ($20.9 billion) deal is expected to close in the first half of 2025, pending formal acceptance by the companies of the CMA’s terms. Notably, the same antitrust body last year initially blocked UK approval for Microsoft's proposed $69 billion takeover of Activision Blizzard, before later approving it under a new deal in which Microsoft would not acquire Activision's cloud streaming rights outside the EEA.
Tags: Three UK, United Kingdom, Vodafone[ 51 comments ]
