Three and Vodafone’s proposed merger is being called into question as the competition watchdog, the Computer and Markets Authority (CMA), begins its investigation into the possible repercussions of the merger for consumers.
Vodafone and Three are the third and fourth largest mobile network operators in the UK, respectively. Vodafone has 18.2 million subscribers as of November 2023, while Three has 10.3 million as of May 2023.
The Vodafone and Three merger is being investigated
The union was first announced back in June, with the two companies agreeing to invest £11 billion ($13.9 billion) into 5G infrastructure in the UK over the next decade. The agreement between Vodafone Group and CK Hutchinson Group (Three owner) was split with Vodafone owning 51% of the merged company and Three owning 49% of it.
“The merger is great for customers, great for the country, and great for competition,” Margherita Della Valle, Vodafone Group Chief Executive, said in a statement at the time. “It’s transformative as it will create a best-in-class – indeed best in Europe – 5G network, offering customers a superior experience.”
By 2030, the merger, tentatively called MergeCo, is expected to bring £5 billion per year ($6.35 billion) in economic benefit, according to representatives for Vodafone Group and CK Hutchinson Group.
Phase 1 of the CMA investigation into the merger will take 40 days. During this 40-day period, the CMA will aim to ascertain whether the merger of these two phone giants will lead to a “substantial lessening of competition.” If watchdog officials do indeed find this, they may commence Phase 2 of the investigation process.
Sarah Cardell, CEO of the CMA, said the following in a statement: “This deal would bring together two of the major players in the UK telecommunications market, which is critical to millions of everyday customers, businesses and the wider economy. The CMA will assess how the tie-up between rival networks could impact competition before deciding next steps.”
Featured image: Photo by John Michael Wilyat on Unsplash.
