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The formal investigation will examine the impact that the deal will have on market competition and what this could mean for customers
The UK Competition and Markets Authority (CMA) has begun the first phase of its investigation into the proposed merger of mobile network operators Three UK and Vodafone UK.
Prior to the investigation’s launch, the CMA collected pre-notification evidence and information from both companies, as well as early views from stakeholders.
The investigation will last 40 days, aiming to identify whether the merger would cause ‘substantial lessening of competition’ and, if this is the case, where a more detailed investigation will be needed. After the 40 days, the CMA will publish its findings and next necessary steps.
“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,” said Sarah Cardell, Chief Executive of the CMA in a government statement.
“The CMA will assess how this tie-up between rival networks could impact competition,” she continued.
The high level of CMA intervention is necessary because, if the deal is given the greenlight, it will reduce the number of MNOs in the UK from four to three, with the newly merged company having a market share of 32.1%.
The merger was agreed last year, with Vodafone taking a 52% in the new business and Three UK taking the remaining minority stake. Vodafone UK’s CEO Ahmed Essam will lead the business, and Three UK’s Chief Financial Officer (CFO) Darren Purkis will assume his same role at the new enterprise.
The two companies emphasise that the merger will be beneficial to the UK telecoms market, giving them the freedom to jointly invest £11 billion in services and next generation wireless infrastructure.
“Thanks to this transaction, 95% of the population and every school and hospital will be covered by standalone 5G by the end of the decade,” said Robert Finnegan, CEO of Three UK.
The CMA is now inviting views by 9 February 2024 on how the merger could affect competition.
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