The UK’s competition regulator has approved the £16bn merger of Three and Vodafone subject to a series of binding commitments.
The two firms unveiled plans to merge last June, saying the tie-up would mean customers “enjoy a better network experience with greater coverage and reliability at no extra cost.”
In September the Competition and Markets Authority raised concerns that the tie-up could see “tens of millions” of customers face higher prices or less generous talk plan allowances.
However, in November it provisionally found that concerns could be addressed through a series of obligations and restrictions enforced by it and telecoms regulator Ofcom.
These included the two firms delivering their planned network upgrades and retaining certain existing mobile tariffs and data plans for at least 3 years, protecting millions of current and future customers from short-term price rises.
Other conditions included guaranteed pricing for virtual operators such as Sky Mobile and Lebara, who buy services from the big four and resell to end users.
Having consulted with stakeholders, the independent inquiry group which led the CMA’s investigation says it’s now satisfied that these conditions would resolve its competition concerns.
Inquiry chair Stuart McIntosh said: “It’s crucial this merger doesn’t harm competition, which is why we’ve spent time considering how it could impact the telecoms market.
“Having carefully considered the evidence, as well as the extensive feedback we have received, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.
“Both Ofcom and the CMA would oversee the implementation of these legally binding commitments, which would help enhance the UK’s 5G capability whilst preserving effective competition in the sector.”
Welcoming the CMA’s announcement, Vodafone Group CEO Margherita Della Valle said: “Today’s decision creates a new force in the UK’s telecoms market and unlocks the investment needed to build the network infrastructure the country deserves.
“Consumers and businesses will enjoy wider coverage, faster speeds and better-quality connections across the UK, as we build the biggest and best network in our home market.
“Today’s approval releases the handbrake on the UK’s telecoms industry, and the increased investment will power the UK to the forefront of European telecommunications.”
Canning Fok, Chairman of Three owners CK Hutchison Group Telecom Holdings, added: “We have been operating telecoms businesses in the UK for over three decades and Three UK for the past two.
“We have invested in the people and the infrastructure, helping to bring the benefits of mobile connectivity to UK businesses and consumers.
“When Three and Vodafone are combined, CK Hutchison will fully support the merged business in implementing its network investment plan, the cornerstone of today’s approval by the CMA, transforming the UK’s digital infrastructure and ensuring customers across the country benefit from world-beating network quality.”