Regulators on Vodafone and Three mergers
A planned merger between Vodafone UK and Three UK, according to the UK Competition & Markets Commission on Friday, may result in higher consumer pricing and less investment in UK mobile networks. Three UK is owned by Hong Kong-based CK Hutchison Holdings Ltd., a corporation focused on infrastructure, retail, ports, and telecommunications. Vodafone UK is controlled by Berkshire, England-based Vodafone Group PLC.
CMA Claim
The CMA claims that the agreement may affect future infrastructure investments and result in increased prices for consumers. Before formally advancing the probe, the CMA has granted both parties a modest five working days to address its concerns with “meaningful solutions.”
Julie Bon, the deputy chief economic adviser for the CMA, stated in a statement, “Our initial assessment of this deal has identified concerns which could lead to higher prices for customers and lower investment in U.K. mobile networks.” “Until Vodafone and Three can come up with solutions, these warrant a thorough investigation.”
Major Announcement
The announcement comes about nine months after the $19 billion deal’s initial proposals surfaced. If approved, this would effectively decrease the number of major mobile network carriers in the United Kingdom from four to three (EE and O2). The two had previously given themselves until the end of 2024 to complete the deal, so they were obviously aware of potential regulatory obstacles. The first “phase 1” investigation began at the end of January. Prior to determining if a formal inquiry was necessary, the CMA conducted a market research to gather input from a wide range of stakeholders.
“Whilst Vodafone and Three have made a number of claims about how their deal is good for competition and investment, the CMA has not seen sufficient evidence to date to back these claims.” The Competition Commission of Australia (CCA) has given Vodafone UK and Three UK five working days “to respond with meaningful solutions” or it would launch a thorough phase 2 probe into the merger. In London on Friday morning, Vodafone’s shares increased 2.3% to 69.06 pence despite the regulator’s inspection.
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