UK regulators want to investigate Three and Vodafone's blockbuster merger
The CMA is worried that it could lead to higher prices and lower quality of service.
The UK's Competition and Markets Authority (CMA) is concerned that the merger Three and Vodafone announced last year could lead to "substantial lessening of competition" and might conduct an in-depth investigation into the deal. Three years after Virgin Media's merger with O2, Three and Vodafone revealed their intention to enter a joint venture agreement that would knock off a standalone mobile network from consumers' choices in the region. go
Apparently, CMA regulators launched a preliminary investigation into their proposed deal back in January and had identified potential issues that could come with combining two of the four remaining mobile network operators in the UK. Those issues include the possibility of the merger leading to higher prices and lower quality of service, since competition typically helps keep prices low and compels operators to make investments meant to improve their network quality. In addition, the CMA is worried that having fewer networks could affect mobile virtual network operators' ability to negotiate for the best deals possible for their customers.
When the two companies announced the merger in 2023, they said that together, they will "have the scale needed to deliver a best-in-class 5G network" and open up "new opportunities for businesses across the length and breadth of the UK." But CMA regulators say their claims "need more detailed assessment." They've now given the companies five working days to respond to their concerns with "meaningful solutions," otherwise they'll proceed towards conducting a more in-depth investigation.
In 2015, Three also made an attempt to purchase O2 for £10.25 billion ($12.9 billion), but the CMA and the European Commission blocked the purchase after concluding that it would reduce competition and lead to higher prices. The CMA approved the joint agreement between O2 and Virgin Media, a landline, cable and broadband operator, however, after it found those very same concerns to be unfounded.
