CMA to Approve Vodafone – 3 UK Merger

The UK’s Competition and Markets Authority indicated it will approve Vodafone and 3 UK’s tie-up. The CMA's decision largely depends on the companies following through on pledges that address competition concerns.

The regulator said that it had provisionally found a commitment by the merged company to invest £11 billion to upgrade its network, including the rollout of 5G and short-term customer protections, could address concerns it raised in September. CMA’s latest announcement signals its stance on the merger has softened significantly after it warned of potential negative effects for consumers and MVNOs just two months ago while arguing the benefits outlined by the pair about their proposed 5G investment were being overstated.

The companies responded by stating the merger was a once-in-a-generation opportunity to transform UK digital infrastructure with £11 billion of network investment while making other commitments around the retail and wholesale segments of the market. However, while the signs are now more positive, there is still work to do. CMA has set out a Remedies Working Paper to seek feedback from the wider industry on the pair’s package, before it makes a final decision on 7 December.

Proposed remedies include retaining certain existing mobile tariffs and data plans for three years and setting pre-agreed prices on a wholesale basis for MVNOs. Their joint network investment plan must also be delivered over the next eight years and will be subject to legal scrutiny by Ofcom and the CMA. Responding to the CMA’s announcement, the companies said they will study the Working Paper in detail, adding that from what has been communicated so far, they believe it provides a path to final clearance.