UK raises competition concerns over Vodafone-Three merger

The UK challenged Vodafone and Three’s claims that their £15 billion (S$25.6 billion) combination would leave the country’s mobile networks better off, saying the deal raises serious competition concerns, while still leaving a potential path for its completion.

The UK’s Competition and Markets Authority (CMA) said on Friday (Sep 13) that it had found issues with the combination, with price rises and customers getting a reduced service particularly of concern. However, it did find the merger could improve the quality of the mobile networks.

The deal with the Hong Kong billionaire Li family’s CK Hutchison Holdings would see the two smallest of the UK’s four mobile operators combine to create the country’s largest by revenue in the fiercely competitive market.

Karen Egan from Enders Analysis said the regulator’s decision was essentially a green light for the merger. The pricing harms were “modest” and the proposed remedies are easy for the companies to follow.

The competition watchdog will now ask Vodafone to offer solutions for remedies to clear the deal before its final decision on Dec 7.

Although it said the deal could improve the quality of mobile networks and speed up the deployment of new 5G networks, the agency said they may not have the incentive to follow through with the proposed investment after the merger. BusinessTimes