Vodafone, Three respond to CMA remedies notice
October 1, 2024
By Colin Mann
UK telcos Vodafone and Three’s response to the UK Competitions and Markets Authority’s (CMA) Notice of Possible Remedies (Remedies Notice) has been published.
The pair disagree with the CMA’s Provisional Findings, suggesting the merger will be pro-growth, pro-customer, pro-investment and pro-competitive for the UK. “It is a once-in-a-generation opportunity to transform UK digital infrastructure with £11 billion [€11bn] of network investment,” they assert.
“We continue to constructively engage with the CMA and remain confident that we can work with them to secure approval,” they say. “Our response to the Remedies Notice contains several additional commitments, which we believe comprehensively address the issues they have raised.”
Vodafone and Three have already made two substantive commitments:
- They say the £11 billion network investment commitment will ensure UK customers enjoy one of Europe’s most advanced networks and it will level the playing field with the two larger players to drive competitiveness. They are happy for Ofcom to monitor and enforce this commitment.
- The merger will extend the network quality benefits well beyond the merged company’s own customer base, by extending it to VMO2’s direct and MVNO customers. This agreement will deliver better quality, enhanced capacity and greater coverage to over 50 million mobile customers across the country. On approval of the merger, Vodafone and Three have also agreed to sell spectrum to VMO2, helping to create a better alignment of spectrum holdings in the UK market.
“While we do not agree with the CMA’s provisional findings that prices will increase, we continue to explore how we can answer its concerns,” they confirm. Addressing both the retail and wholesale segments of the market, their additional commitments include:
- For retail customers: they will maintain tariffs at £10 or below for two years from the completion of the merger for value-focused customers on the SMARTY brand, social tariffs on both the SMARTY and VOXI For Now brands, and continue measures to protect registered vulnerable customers; and
- For wholesale customers: they will provide a reference offer that encourages MVNOs – the fastest growing part of the market – to access our additional network capacity to offer great deals to retail customers.
“The merger of Vodafone and Three is a catalyst for change,” they declare. “It will deliver a step-change in connectivity to UK customers and bring best-in-class 5G to every school and hospital in the country. Transforming the UK’s digital infrastructure is also vitally important for businesses, the public sector, the UK’s technological advancement, and the government’s stated mission to kickstart economic growth.”
“We will set out comprehensively why the merger is pro-growth, pro-customer, pro-investment and pro-competitive in our forthcoming response to the CMA’s Provisional Findings,” they state.
The CMA’s final decision on the merger is not expected until December 7th, with Vodafone and Three confirming they will continue to engage positively with the Authority to resolve outstanding matters.
Paolo Pescatore, TMT Analyst at PP Foresight describes the telcos’ response as “unsurprising” as they still disagree largely with the remedies, but encouragingly, have shown a clear willingness to work closely on a number of areas such as commitment to investment over the long period, price freeze on selected tariffs under £10 for two years and collaborating on increasing competition in wholesale.
“It remains to be seen if the entity has done enough on pricing to ease the CMA’s concerns,” he suggests. “This could be a sticking point that makes or break it. A path to approval exists which is key for all parties.”