CMA provisionally accepts Vodafone/Three merger remedies
November 5, 2024
By Colin Mann
The UK’s Competition and Markets Authority (CMA) has provisionally found that a multi-billion-pound commitment to upgrade the merged company’s network across the UK, including the roll-out of 5G, combined with short-term customer protections could solve competition concerns identified in September 2024 and allow the merger to go ahead.
The CMA investigation – led by an independent inquiry group – provisionally found in September that the merger could lead to higher prices for customers and harm the position of mobile virtual network operators, such as Sky Mobile, Lyca, Lebara and iD Mobile. The CMA also consulted on potential solutions to address its concerns – known as remedies.
The CMA has set out a Remedies Working Paper to seek views on the effectiveness of a proposed remedy package.
It provisionally finds that a legally binding commitment to undertake the network integration and investment programme proposed by Vodafone and Three would significantly improve the quality of the merged company’s mobile network, boosting competition between mobile network operators in the long term and benefiting millions of people who rely on mobile services.
The CMA also found that short term protections would be needed to ensure that retail consumers and mobile virtual network operators can continue to secure good deals during the initial years of network integration and investment roll-out.
The remedies proposed would require Vodafone and Three to:
- Deliver their joint network plan – which sets out the network upgrade and improvements they will make through significant levels of investment over the next eight years across the UK. This would be a legal obligation overseen by both Ofcom – the telecoms regulator – and the CMA
• Commit to retain certain existing mobile tariffs and data plans for at least three years, protecting millions of current and future Vodafone/Three customers (including customers on their sub-brands) from short-term price rises in the early years of the network plan
• Commit to pre-agreed prices and contract terms to ensure that Mobile Virtual Network Operators can obtain competitive wholesale deals
Stuart McIntosh, chair of the inquiry group leading the investigation, said: “We believe this deal has the potential to be pro-competitive for the UK mobile sector if our concerns are addressed. Our provisional view is that binding commitments combined with short-term protections for consumers and wholesale providers would address our concerns while preserving the benefits of this merger.”
“A legally binding network commitment would boost competition in the longer term and the additional measures would protect consumers and wholesale customers while the network upgrades are being rolled out.”
The CMA announcement is provisional, with a final decision due before the December 7th statutory deadline. The inquiry group is inviting feedback on today’s announcement by 5pm on November 12th.