TECH

UK Regulators Approve Vodafone and Three’s $19 Billion Merger with Conditions

The U.K.’s antitrust authority has approved the long-awaited merger plan between two of the nation’s largest telecommunications providers.

Vodafone and Three are two of the U.K.’s four infrastructure-owning mobile network operators (MNOs), alongside O2 and EE. Therefore, when the two companies announced their intention to merge in a $19 billion deal last June, it was anticipated that the transaction would face scrutiny. The Competition and Markets Authority (CMA) initiated its initial “phase 1” investigation in January and escalated to a full in-depth examination in June, following a market analysis and industry feedback collection.

In September, the CMA revealed its provisional findings, indicating that the merger could lead to increased consumer prices, reduced service quality, and lower investments in U.K. mobile networks. However, rather than blocking the deal, it proposed possible remedies to address its concerns.

Now, we have reached a pivotal moment as the CMA has granted approval for the merger—conditional upon certain requirements. It stated that both companies must commit to “invest billions” to develop a unified 5G network throughout the U.K. In the short term, the CMA also mandated that the newly formed entity must limit “certain mobile tariffs” for three years, while mobile virtual network operators (MVNOs) would retain their predetermined contractual terms for the same duration.

These commitments will be monitored by the CMA and Ofcom, the U.K.’s regulatory and competition authority for the telecommunications sector.

“It’s vital that this merger does not harm competition, which is why we have taken the time to assess its potential impacts on the telecoms market,” stated Stuart McIntosh, chair of the CMA’s inquiry committee. “After meticulously reviewing the evidence and the substantial feedback we have received, we believe that the merger is likely to enhance competition in the U.K. mobile sector and should be allowed to move forward—provided that Vodafone and Three agree to implement our suggested measures.”

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