Friday, April 19, 2024
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    Vodafone UK and Three UK merger referred to competition authority for deeper scrutiny

    The proposed merger of Vodafone UK and Three UK has been referred to the UK’s Competition and Markets Authority (CMA) for a phase 2 review as the UK looks more deeply into the proposed merger first mooted lasts June.

    The move was an expected next step in the process and in line with the timeframe for completion that we set out from the outset.

    Vodafone UK and Three UK say that they remain confident that the transaction will deliver significant benefits for competition, customers and the country.

    The current market structure has resulted in the quality of mobile network services in the UK lagging significantly behind other European countries. Vodafone UK and Three UK are sub-scale, unable to cover their cost of capital, and constrained in their ability to invest and compete effectively against the two market leaders. As a result, customers and businesses are missing out on the benefits offered by enhanced digital connectivity.

    The merger will create a third Mobile Network Operator with scale, able and incentivised to invest fully in a best-in-class network. Millions of customers across the UK will benefit from day one, thanks to a step-change in network quality, speed, and coverage. A combined network would also boost competition in the wholesale market, by offering greater choice to MVNOs, the fastest growing segment of the UK’s mobile industry.

    The two companies say that they will review the potential concerns raised by the CMA and look forward to continuing to engage constructively with them as we set out the benefits of the merger for competition and for UK consumers and businesses.

    Vodafone UK CEO, Ahmed Essam, adds: “Having reached this important milestone, we look forward to working with the independent panel on the Phase 2 process. By merging our two companies, we will be able to invest £11 billion to help the UK realise its ambitions to be a world leader in next-generation 5G technology, and increase competition across the industry.

    “This transaction will create an operator with the scale required to take on BTEE and VMO2, give MVNOs greater choice in the wholesale market and is in the wider interests of customers, competition and the country.”

    Three UK CEO, Robert Finnegan, says: “The current market structure is holding the UK back, which is not good for customers or competition. By creating a third player with the necessary scale to invest, the combination of our two companies will deliver one of Europe’s most advanced networks and move the UK into the digital fast lane, benefiting customers from Day One.”

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