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Today’s decision marks the culmination of an 18-month review process and paves the way for the creation of a new mobile market leader in the UK
The Competition and Market’s Authority (CMA) has today approved the £15 billion merger of Vodafone and Three, which will create the country’s largest mobile operator.
The combined business will have around 29 million mobile customers, topping previous market leader EE’s roughly 25 million.
The approval of the deal was contingent on the newly merged company adhering to certain legally binding commitments.
These are:
- Network Upgrades: Vodafone and Three must deliver an 8-year plan to upgrade and integrate their networks, improving quality and boosting long-term competition among mobile operators. This is expected to cost £11 billion. The new network will aim to cover 99% of the UK population.
- Price Caps: For three years, selected mobile tariffs and data plans will be capped to protect Vodafone and Three customers from early price increases.
- Fair Wholesale Access: Virtual network providers will receive competitive prices and contract terms for three years during the network rollout.
“It’s a decision that will be looked back on as one of the most pivotal moments in the history of UK mobile,” said CCS Insight’s Kester Mann in a LinkedIn post. “For Vodafone and Three, the outcome is about as good as it could have got. Not only did they secure approval, but the agreed remedies and commitments are less onerous than many had feared.”
After the merger was first announced two years ago, the deal had been bombarded with criticism that it would harm competition in the UK market, which led to an extensive review by the CMA. This most notably included damning statements from incumbent operator BT, which argued in a 40-page report that the deal would result in “higher prices, poorer network quality, and reduced incentives to invest – all to the detriment of UK consumers.”
In today’s ruling, however, the CMA has assuaged these fears, saying they believe the deal will be good for consumers.
“It’s crucial this merger doesn’t harm competition, which is why we’ve spent time considering how it could impact the telecoms market,” said Stuart McIntosh, chair of the independent inquiry group leading the investigation in the official press release.
“Having carefully considered the evidence, as well as the extensive feedback we have received, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.”
“Today’s decision creates a new force in the UK’s telecoms market and unlocks the investment needed to build the network infrastructure the country deserves. Consumers and businesses will enjoy wider coverage, faster speeds and better-quality connections across the UK, as we build the biggest and best network in our home market.
“Today’s approval releases the handbrake on the UK’s telecoms industry, and the increased investment will power the UK to the forefront of European telecommunications,” said Vodafone CEO Margherita Della Valle in a statement.
The merger is expected to be finalised in the first half of 2025.
Vodafone will hold a 51% stake in the combined company, while Three’s parent company CK Hutchison will retain 49%, with an option for Vodafone to acquire Hutchison’s stake after three years, subject to conditions.
Also in the news:
TFL announces full 4G coverage on London’s Elizabeth Line
Vodafone to sell off last remnant of Indus Towers stake
EE airdrops mobile tower into Isle of Skye
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